Decree No. 59/2021/NĐ-CP stipulates certain special contents regarding the financial management mechanism and assessment of operational effectiveness for the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

DECREE
Regulations on certain special contents regarding financial management mechanisms and effectiveness evaluation for the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation

_______

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

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

Pursuant to the Enterprise Law dated June 17, 2020,

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

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

At the proposal of the Minister of Finance,

The Government issues this Decree prescribing certain special contents regarding financial management mechanisms and effectiveness evaluation for the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree prescribes certain special contents regarding financial management mechanisms and effectiveness evaluation for the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

2. In addition to the special provisions set forth in this Decree, the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation shall implement financial management and effectiveness evaluation according to the provisions of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises and related guiding documents, amendments, supplements, or replacements (if any).

Article 2. Applicability

1. The Vietnam Stock Exchange.

2. The Vietnam Securities Depository and Clearing Corporation.

3. The Ministry of Finance is the representative owner entity of the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

4. Other organizations and individuals related to the financial management mechanism and effectiveness evaluation of the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

Chapter II
CERTAIN SPECIAL PROVISIONS ON FINANCIAL MANAGEMENT FOR
THE VIETNAM STOCK EXCHANGE AND THE VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION
Article 3. Investment outside enterprises

1. The Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation may only invest outside enterprises in the securities and securities market sector.

2. The form and authority for investment outside enterprises by the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation shall be carried out in accordance with the laws on management and use of state capital invested in production and business at enterprises and the Charter on organization and operation of the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

Article 4. Revenue

1. The Vietnam Stock Exchange manages revenue and other income in accordance with Article 30 of Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets at enterprises and related guiding documents, amendments, supplements, or replacements (if any). The revenue of the Vietnam Stock Exchange includes:

a) Revenue from business activities including revenue from member management activities; revenue from other business activities as prescribed by law;

b) Revenue from service provision activities including revenue from information provision services; revenue from infrastructure technology services for the securities market; revenue from other services as prescribed by law;

c) Revenue and income from investment capital in subsidiaries including retained earnings after tax remaining after setting up funds at subsidiaries, income from the difference between equity capital and registered capital of subsidiaries; revenue from financial activities and other income as prescribed by law.

2. The Vietnam Securities Depository and Clearing Corporation manages revenue and other income in accordance with Article 30 of Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets at enterprises and related guiding documents, amendments, supplements, or replacements (if any). The revenue of the Vietnam Securities Depository and Clearing Corporation includes:

a) Revenue from business activities including revenue from member management activities; revenue from securities registration activities; revenue from securities custody activities; revenue from securities transfer activities; revenue from rights exercise activities; revenue from securities ownership transfer activities not through trading systems; revenue from agency payment services for interest and principal of government bonds, government-guaranteed bonds, local government bonds; revenue from securities settlement, transaction clearing, position management, position transfer, margin account management, post-trade error correction, delayed payment, cash settlement activities; and revenue from other business activities as prescribed by law;

b) Revenue from service provision activities including revenue from information provision services; revenue from other services as prescribed by law;

c) In addition to revenue from financial activities and other income as prescribed by law on management and use of state capital invested in production and business at enterprises, the Vietnam Securities Depository and Clearing Corporation may include interest income generated from proxy payment activities for dividends, principal, and interest of government bonds, government-guaranteed bonds, local government bonds, other securities, and exercising purchase rights in securities as part of its financial activity revenue.

c) In addition to financial revenue and other income as prescribed by laws on the management and use of state capital for production and business at enterprises, the Vietnam Securities Depository and Central Counterparty Corporation shall record interest from deposits arising from the processing of dividend payments, principal, interest on government bonds, guaranteed bonds, local government bonds, other securities, and the exercise of rights to purchase securities as financial activity revenue.

Article 5. Costs

1. The Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation manage costs in accordance with the provisions of Article 30 of Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of capital and assets in enterprises and guiding documents, amendments, supplements, and replacements (if any).

2. The Vietnam Securities Depository and Clearing Corporation shall be included in costs when determining taxable income for the following specific expenses:

a) Expenses for establishing the Business Risk Prevention Fund in accordance with Clause 3 of Article 156 of Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing certain provisions of the Securities Law and guiding documents, amendments, supplements, and replacements (if any). The establishment of the Business Risk Prevention Fund shall be carried out quarterly. If there is any surplus at the end of the fiscal year, the balance of the Fund shall be transferred to the next year for continued use.

b) Expenses transferred back to subsidiaries of the Vietnam Stock Exchange from revenues generated from securities ownership transfer transactions not conducted through the securities trading system.

Article 6. Evaluation of Operational Effectiveness and Classification of Enterprises

1. The Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation shall conduct evaluations of operational effectiveness and classification of enterprises in accordance with the laws on evaluation of operational effectiveness and classification of state-owned enterprises.

2. When calculating criteria for evaluating the operational effectiveness of enterprises, in addition to objective factors excluded according to the laws on evaluation of operational effectiveness of state-owned enterprises, the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation may exclude the following objective factors:

a) State management policies that affect the listing and trading of securities and registration, depositary, clearing, and settlement of securities transactions in the securities market;

b) For the Vietnam Stock Exchange, business activity revenue, revenue, and income from capital investment in subsidiaries change due to fluctuations in the following factors: number of listed companies, number of companies registered for trading; volume of securities traded and trading prices; number of members of the Vietnam Stock Exchange; value of auctioned bonds, plans, and scale of capital raising through bond issuance; bond transaction value; value of securities ownership transfers not conducted through the trading system; volume of derivative securities transactions; volume of other securities transactions as prescribed by securities laws;

c) For the Vietnam Securities Depository and Clearing Corporation, business activity revenue changes due to fluctuations in the following factors: volume of securities deposited in the year; value of securities registered (for the first time) in the year and the number of times additional securities are registered; principal and interest payment value of government debt instruments, government-guaranteed bonds, local government bonds; number of times rights are exercised and corresponding number of shareholders each time rights are exercised; number of times and value of securities transfers; value of securities ownership transfers not conducted through the trading system; number of depository members, clearing members; number of contracts and value of securities lending and borrowing, end-of-day position balances; end-of-day collateral asset balances, value of securities margin transactions and volume of derivative securities margin positions; number of error correction transactions, number of delayed payment settlement transactions, number of transactions converted to cash settlement.

Article 7. Financial management regulations, supervision and evaluation regulations for the subsidiaries of the Vietnam Securities Commission Trading Center

1. Based on the provisions of this Decree, the laws on financial management and effectiveness assessment of state-owned enterprises, and related laws, the Vietnam Securities Commission Trading Center shall issue financial management regulations and supervision and effectiveness assessment regulations for its subsidiaries.

2. The financial management regulations for subsidiaries include the following main contents:

a) Registered capital, raising capital, and investing capital outside.

b) Investment, construction, procurement of fixed assets, asset management.

c) Revenue of subsidiaries of the Vietnam Securities Commission Trading Center includes: revenue from business activities (revenue from listing activities, revenue from securities trading activities, revenue from derivative securities trading activities, revenue from bond auction activities, revenue from stock auction activities, revenue from non-systematic securities ownership transfer activities, and other business activity revenues); revenue from service provision (revenue from information provision services, revenue from market infrastructure technology services, and other service revenues); financial activity income and other income. Subsidiaries of the Vietnam Securities Commission Trading Center shall record interest income arising from stock auction activities as financial activity income.

d) Expenses of subsidiaries of the Vietnam Securities Commission Trading Center.

đ) Profit distribution after tax and establishment of reserve funds.

e) Other contents as required by management.

3. The supervision and effectiveness assessment regulations for subsidiaries include the following contents:

a) Criteria and basis for assessing business effectiveness and classifying businesses.

b) Methods of assessing effectiveness and results of business classification.

c) When calculating the criteria for assessing business effectiveness, subsidiaries may exclude objective factors as stipulated in Clause 2, Article 6 of this Decree, similar to the Vietnam Securities Commission Trading Center.

d) Other contents as prescribed by law.

Chapter III
RESPONSIBILITIES OF RELATED AUTHORITIES

Article 8. Responsibilities of the Vietnam Securities Commission Trading Center and the Vietnam Securities Depository and Clearing Corporation

1. Adhere to the financial management mechanism and effectiveness assessment regulations as prescribed in the Law on Management and Use of State Capital for Production and Business at Enterprises, this Decree, guiding documents, amendments, supplements, and replacements (if any).

2. Be subject to inspection, examination, and supervision by competent state agencies regarding the financial work of the Vietnam Securities Commission Trading Center and the Vietnam Securities Depository and Clearing Corporation.

3. The Vietnam Securities Commission Trading Center has the responsibility to issue financial management regulations and supervision and effectiveness assessment regulations for subsidiaries based on the provisions of this Decree.

Article 9. Responsibilities of the Ministry of Finance

1. Perform the rights and responsibilities of the representative agency of the owner towards the Vietnam Securities Commission Trading Center and the Vietnam Securities Depository and Clearing Corporation as prescribed in the Law on Management and Use of State Capital for Production and Business at Enterprises, this Decree, and guiding documents, amendments, supplements, and replacements (if any).

2. Evaluate compliance with systems and policies to propose the Government to promulgate, amend, supplement, and replace regulations on the financial management mechanism and effectiveness assessment for the Vietnam Securities Commission Trading Center and the Vietnam Securities Depository and Clearing Corporation.

Chapter IV

IMPLEMENTING PROVISIONS

Article 10. Effective Date

1. This Decree takes effect from August 6, 2021.

2. After being established and operating under the Securities Law 2019, the Vietnam Securities Commission Trading Center and the Vietnam Securities Depository and Clearing Corporation shall implement financial management and effectiveness assessment according to the provisions of this Decree; simultaneously abolish Articles 9, 10, 11, 12, Clause 3 of Article 13, and the phrase "Securities Trading Center, Vietnam Securities Depository Center," "Securities Trading Center and Vietnam Securities Depository Center" in Articles 1, 2, 13, 15, 16, 17 of the Government's Decree No. 122/2017/NĐ-CP dated November 13, 2017, which stipulates special contents about the financial management mechanism and effectiveness assessment for lottery business enterprises; Securities Trading Center and Vietnam Securities Depository Center.

Article 11. Transitional Provisions

1. Securities Trading Centers and Securities Depositories that organize and operate according to the Securities Law No. 70/2006/QH11 amended and supplemented by Law No. 62/2010/QH12 continue to implement financial management and effectiveness assessment according to the provisions of the Government's Decree No. 122/2017/NĐ-CP dated November 13, 2017, which stipulates special contents about the financial management mechanism and effectiveness assessment for lottery business enterprises; Securities Trading Center and Vietnam Securities Depository Center until the Vietnam Securities Commission Trading Center and the Vietnam Securities Depository and Clearing Corporation begin operations according to the Securities Law No. 54/2019/QH14 dated November 26, 2019, except for the provisions of Clause 3 of this Article.

2. For the balance of the Member Damage Compensation Fund up to December 31, 2020, the Hanoi Securities Trading Center and the Ho Chi Minh City Securities Trading Center shall record it as other income and pay corporate income tax according to the law.

3. For the balance of the Business Risk Prevention Fund and the Balance of the Derivative Securities Settlement Risk Prevention Fund at the Vietnam Securities Depository Center

a) The Vietnam Securities Depository Center shall transfer according to the provisions of Clause 15, Article 310 of the Government's Decree No. 155/2020/NĐ-CP dated December 31, 2020, detailing the implementation of some articles of the Securities Law.

b) During the period when the Vietnam Securities Depository and Clearing Corporation has not commenced operations as prescribed by the Securities Law number 54/2019/QH14, the Vietnam Securities Depository Center shall be included in the costs for determining taxable income for the amount set aside for the Business Risk Prevention Fund as stipulated at point a, Clause 2, Article 5 of this Decree.

Article 12. Responsibility for Implementation

The Minister of Finance, the Board of Members, the General Director of the Vietnam Stock Exchange, the Vietnam Securities Depository and Clearing Corporation, and related organizations and individuals are responsible for implementing this Decree.