Circular No. 68/2024/TT-BTC amends and supplements certain provisions of Circulars governing securities transactions on the securities trading system; securities settlement and payment; securities company activities; and information disclosure in the securities market.

CIRCULAR

Amending and supplementing certain articles of Circulars governing securities transactions on the securities trading system; settlement and payment of securities transactions; activities of securities companies and information disclosure on the securities market

___________________

On the basis of Securities Law day 26 of the monthg 11 year 2019;

Pursuant to the Government Decree number Decision No. day 31 of the monthg 12 year 2020 of the Government detailing implementation of certain provisions of the Securities Law;

Pursuant to DecreeNo. The Minister of Finance issues this Circular to repeal Circular No. 118/2013/TT-BTC dated 20th day of April 2023 of the Government stipulating 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 articles of Circulars governing securities transactions on the securities trading system; settlement and payment of securities transactions; activities of securities companies and information disclosure on the securities market.

Article 1. Amending and supplementing certain articles of Circular No. 120/2020/TT-BTC dated December 31, 2020, issued by the Minister of Finance, regarding transactions of listed shares, registered share trading, fund certificates, corporate bonds, and guaranteed warrants listed on the securities trading system (hereinafter referred to as Circular No. 120/2020/TT-BTC).

1. Amending and supplementing Point a Clause 1 Article 7 as follows:

“a) Investors must have sufficient funds when placing orders to buy securities, except for the following cases:

- Investors engaging in margin trading as provided for in Article 9 of this Circular;

- Foreign organizations participating in investment in the Vietnamese securities market (hereinafter referred to as foreign organizational investors) buying shares without requiring sufficient funds when placing orders as provided for in Article 9a of this Circular.”

2. Supplementing Article 9a after Article 9 as follows:

“Article 9a. Transactions of foreign organizational investors buying shares without requiring sufficient funds when placing orders

1. Securities companies shall assess the settlement risk of foreign organizational investors to determine the amount of funds required when placing orders to buy shares (if any), according to the agreement between the securities company and the foreign organizational investor or the representative authorized by the foreign organizational investor.

2. In case a foreign organizational investor fails to pay the full amount for the transaction to buy shares, the obligation to settle the shortfall in the transaction shall be transferred to the securities company where the foreign organizational investor placed the order through its proprietary account, except in the case provided for in Clause 5 of this Article.

3. The securities company may transfer ownership outside the securities trading system according to Point q1 Clause 2 Article 6 of Circular No. 119/2020/TT-BTC dated December 31, 2020, issued by the Minister of Finance, regarding registration, custody, settlement, and payment of securities transactions or negotiated sale on the securities trading system for the number of shares transferred to its proprietary account from a foreign organizational investor who lacks funds to settle the purchase transaction as provided for in Clause 2 of this Article, not later than the next trading day after the shares are recorded in the proprietary account of the securities company and ensuring that it does not exceed the maximum limit on the proportion of ownership of foreign investors as prescribed by law for those shares. Any losses, gains, and other costs arising from implementing the transactions as provided for in Clauses 2 and 3 of this Article shall be carried out according to the agreement between the securities company and the foreign organizational investor or the representative authorized by the foreign organizational investor.

4. Except for transactions provided for in Clause 3 of this Article, the securities company shall sell shares on the securities trading system for the number of shares transferred to its proprietary account. Any losses, gains, and other costs arising from implementing the transactions as provided for in Clauses 2 and 4 of this Article shall be carried out according to the agreement between the securities company and the foreign organizational investor or the representative authorized by the foreign organizational investor.

5. The depositary bank where the foreign organizational investor opens a securities deposit account shall be responsible for settling the shortfall in the transaction and any incurred costs (if any) in the event of incorrect confirmation of the balance of deposits of the foreign organizational investor with the securities company leading to insufficient funds to settle the purchase transaction of shares.”

Article 2. Amending and supplementing some articles of Circular No. 119/2020/TT-BTC dated December 31, 2020 of the Minister of Finance on securities registration, custody, netting, and settlement activities (hereinafter referred to as Circular No. 119/2020/TT-BTC).

1. Supplement Point q1 after Point q Clause 2 Article 6 as follows:

“q1) Transfer ownership rights over the number of shares transferred to the proprietary account of the securities company as stipulated in Clause 2 Article 35a of this Circular to the account of foreign investors who are organizations in cases where the negotiated sale on the securities trading system as prescribed in Clause 3 Article 9a of Circular No. 120/2020/TT-BTC cannot be implemented due to the transaction price being outside the price range or the volume of shares not meeting the minimum negotiated transaction volume of the Securities Exchange on the day of transferring ownership rights.”

2. Supplement Article 35a after Article 35 as follows:

“Article 35a. Settlement of transactions for purchasing shares by foreign investors who are organizations as prescribed in Article 9a of Circular No. 120/2020/TT-BTC

1. Foreign investors who are organizations placing orders to purchase shares must have sufficient funds in their accounts before the depository member has to transfer money into the deposit account of the depository member at the payment bank to execute securities settlement transactions. The netting and settlement of transactions for purchasing shares shall be carried out in accordance with the laws and regulations of the Vietnam Securities Depository and Clearing Corporation.

2. In cases where foreign investors who are organizations placing orders to purchase shares lack the funds for settlement as prescribed in Clause 2 Article 9a of Circular No. 120/2020/TT-BTC, the Vietnam Securities Depository and Clearing Corporation shall transfer the obligation to settle the shortfall in the purchase share transaction of the foreign investor who is an organization to the obligation of the securities company where the investor placed the order to purchase shares (through the proprietary account of the securities company) on the settlement date, based on the following notifications:

a) In cases where foreign investors who are organizations open a deposit account at a securities company, the securities company shall notify the Vietnam Securities Depository and Clearing Corporation about the foreign investor's lack of funds for settlement of the purchase share transaction and the transaction information requesting the transfer to become the settlement obligation of the securities company;

b) In cases where foreign investors who are organizations open a deposit account at a depositary bank, the depositary bank shall notify the Vietnam Securities Depository and Clearing Corporation about the foreign investor's lack of funds for settlement of the purchase share transaction and the refusal to settle the transaction with insufficient funds.

3. The securities company must ensure sufficient funds to settle the transaction as prescribed in Clause 2 of this Article. The securities company will be subject to violation handling according to the laws and regulations of the Vietnam Securities Depository and Clearing Corporation in cases where it fails to fulfill the obligations prescribed in Clause 2 of this Article.”

Article 3. Amending and supplementing some articles of Circular No. 121/2020/TT-BTC dated December 31, 2020 of the Minister of Finance on the operation of securities companies.

1. Amend Clause 8 Article 16 as follows:

“8. In cases where customers open deposit accounts at depository members who are not trading members, the trading member and the depository member must sign an agreement to agree on the responsibility to ensure the principle that the trading member is responsible for executing customer orders, the depository member is responsible for checking the balance of funds and securities of customers and the depository member, and the trading member and depository member guarantee settlement for customers in accordance with the law.

In cases where the trading member receives an order to buy shares without requiring sufficient funds as prescribed in Article 9a of Circular No. 120/2020/TT-BTC, at the end of the trading day, the trading member must inform the depository member where the foreign investor who is an organization opens a deposit account of detailed information about the order to buy shares without requiring sufficient funds when placing the order as prescribed in Article 9a of Circular No. 120/2020/TT-BTC to coordinate in implementing securities settlement transactions in accordance with securities laws and regulations of the Vietnam Securities Depository and Clearing Corporation.

2. Supplement Clause 9, Clause 10 after Clause 8 Article 16 as follows:

“9. When securities companies receive orders to buy shares without requiring sufficient funds from foreign investors who are organizations as prescribed in Article 9a of Circular No. 120/2020/TT-BTC, they must comply with:

a) The limit on receiving orders to buy shares is determined according to the provisions of Clause 10 of this Article;

b) Not accepting orders to buy shares from the securities company itself;

c) Not accepting orders to buy shares from the parent company of the securities company. In cases where subsidiaries of the same parent company of the securities company own shares of the securities company, the securities company shall not accept orders to buy shares from these subsidiaries.

10. Securities companies must determine the limit on receiving orders to buy shares without requiring sufficient funds from foreign investors who are organizations at the beginning of the trading day and retain documentation and information determining this limit. The limit on receiving orders to buy shares is determined as follows:

- The limit on receiving orders to buy shares equals the total amount of items that can be converted into cash but does not exceed the difference between twice the paid-in capital of the securities company and the outstanding margin loan for securities margin trading;

- Items that can be converted into cash include cash in the fund; bank deposits, government debt instruments, undeployed certificate of deposits not used to secure financial obligations; available overdraft limits; available payment guarantee limits (if any) granted by domestic and foreign credit institutions; proceeds from selling proprietary securities pending receipt; advance payments for listed and registered securities sales; funds of foreign investors who are organizations as prescribed in Clause 1 Article 9a of Circular No. 120/2020/TT-BTC to ensure the ability to settle their purchase share transactions;

- The shareholders' equity of a securities company is determined based on the most recent quarterly financial report prepared before the calculation date. In the case where the securities company is a parent company, the shareholders' equity is determined based on the consolidated quarterly financial report after excluding the interests of non-controlling shareholders.

3. Add Clause 7 following Clause 6 of Article 28 as follows:

“7. Where a securities company implements the provisions set out in Clause 2 of Article 9a of Circular No. 120/2020/TT-BTC leading to exceeding the investment limit prescribed in Clause 4 of this Article, the securities company shall not continue to accept orders to purchase shares without sufficient funds from foreign investors who are organizations until it meets the investment limit and must take necessary measures within a maximum period of one year to comply with the investment limit.”

Article 4. Amending and supplementing certain articles of Circular No. 96/2020/TT-BTC dated November 16, 2020, issued by the Minister of Finance guiding the disclosure of information on the securities market

1. Amend and supplement Article 5 as follows:

“Article 5. Language for disclosing information on the securities market

1. The language for disclosing information on the securities market is Vietnamese. Listed organizations, public companies, stock exchanges, and the Vietnam Securities Depository and Central Counterparty Corporation shall simultaneously disclose information in English according to the provisions of Clause 2 and Clause 3 of this Article. Information disclosed in English must be consistent with the content of the information disclosed in Vietnamese. In cases where there are differences or different interpretations between the information in Vietnamese and English, the information in Vietnamese shall be applied.

2. Listed organizations and public companies shall simultaneously disclose information in English according to the following schedule:

a) Large-scale listed organizations and public companies shall disclose periodic information in English starting from January 1, 2025;

b) Large-scale listed organizations and public companies shall disclose extraordinary information, information upon request, and information about other activities of public companies in English starting from January 1, 2026;

c) Public companies that do not fall under the provisions of points a and b of this clause shall disclose periodic information in English starting from January 1, 2027;

d) Public companies that do not fall under the provisions of points a and b of this clause shall disclose extraordinary information, information upon request, and information about other activities of public companies in English starting from January 1, 2028.

3. Stock exchanges and the Vietnam Securities Depository and Central Counterparty Corporation shall disclose information in both Vietnamese and English.”

2. Add Clause 8 following Clause 7 of Article 25 as follows:

“8. Where a foreign investor who is an organization does not execute the repurchase of shares as stipulated in Clause 3 of Article 9a of Circular No. 120/2020/TT-BTC, the securities company where the foreign investor is an organization places trading orders must publish information on the information dissemination means of the State Securities Commission, stock exchange, and the Vietnam Securities Depository and Central Counterparty Corporation, and simultaneously publish information on the securities company's electronic website regarding the trading activities of the foreign investor who is an organization according to the model prescribed in Appendix XVII attached to this Circular within 24 hours from the time the foreign investor who is an organization does not execute the repurchase of shares as stipulated.”

3. Amend and supplement Point a of Clause 1 of Article 33 as follows:

“a) At least three working days prior to the planned transaction date, insiders and related parties must disclose information about the planned transaction according to the model prescribed in Appendix XIII or Appendix XIV attached to this Circular, except when the securities company is a related party of an insider of a listed organization or an organization registered for trading when executing transactions as stipulated in Clauses 2 and 3 of Article 9a of Circular No. 120/2020/TT-BTC.

In the case of implementing transactions as stipulated in Clause 4 of Article 9a of Circular No. 120/2020/TT-BTC, the exemption from disclosure of information applies to transactions executed within four working days from the date the shares are credited to the securities company’s proprietary account.”

4. Add Clause 8 following Clause 7 of Article 33 as follows:

“8. Where a securities company is a related party of an insider of a listed organization or an organization registered for trading, the securities company must disclose information and report to the State Securities Commission, stock exchange, and notify the listed organization or organization registered for trading when the value of transactions in a day reaches 50 million Vietnamese dong or more, or the value of transactions in a month reaches 200 million Vietnamese dong or more, calculated based on par value, including the case of transferring ownership outside the securities trading system according to the model prescribed in Appendix XVIII attached to this Circular within 24 hours from the following times:

a) Completion of transaction settlement as stipulated in Clause 2 of Article 35a of Circular No. 119/2020/TT-BTC;

b) Completion of selling shares as stipulated in Clauses 3 and 4 of Article 9a of Circular No. 120/2020/TT-BTC.”

5. Add Appendix XVII and Appendix XVIII following Appendix XVI.

Article 5. Implementation Provisions

1. This Circular takes effect from November 2, 2024.

2. The Vietnam Securities Depository and Central Counterparty Corporation shall implement securities transaction netting, settlement, and management and utilization of the payment support fund according to the provisions of Article 35a and Clause 3 of Article 45 of Circular No. 119/2020/TT-BTC until the securities transaction netting and settlement mechanism through central counterparty clearing is officially implemented.

3. The State Securities Commission, Vietnam Stock Exchange, Hanoi Stock Exchange, Ho Chi Minh City Stock Exchange, Vietnam Securities Depository and Central Counterparty Corporation, securities companies, depositary members, and other relevant organizations and individuals are responsible for implementing this Circular./.