Circular No. 87/2013/TT-BTC guiding electronic transactions on the securities market

CIRCULAR

Guidelines for electronic transactions on the securities market

------------------------------

Pursuant to the Securities Law No. 70/2006/QH11 dated June 29, 2006;

BASED ON THE LAW AMENDING AND COMPLEMENTING CERTAIN PROVISIONS OF THE SECURITIES LAW NUMBER 62/2010/QH12 OF NOVEMBER 24, 2010;

||| Pursuant to Decree No. 63/2018/NĐ-CP dated May 4, 2018 of the Government on public-private partnership investment;

Pursuant to the Law on Information Technology No. 67/2006/QH11 dated June 29, 2006;

Pursuant to Decree No. 27/2007/NĐ-CP dated February 23, 2007 of the Government on electronic transactions in financial activities;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of 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 issues this Circular guiding electronic transactions in the securities market as follows:

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates principles and procedures for organizing electronic transactions in online securities trading activities, electronic information exchange related to public offering of securities, securities custody, listing, registration, and trading of securities; management activities of securities companies, fund management companies, investment securities companies; information disclosure activities and other activities related to the securities market as prescribed in the Securities Law No. 70/2006/QH11 dated June 29, 2006 and the Law Amending and Supplementing Certain Provisions of the Securities Law No. 62/2010/QH12 dated November 24, 2010 (hereinafter referred to as the Securities Law).

Article 2. Scope of Application

The regulated objects include: State Securities Commission (SSC), Stock Exchange (SE), Vietnam Securities Depository (VSD), issuers, listed entities, securities companies, fund management companies, investment securities companies, public companies, investors, and other intermediaries choosing to conduct securities and securities market activities electronically.

Article 3. Explanation of Terms

1. Electronic transactions in the securities sector are transactions in securities service activities and the securities market conducted through electronic means, including: public offering of securities, securities custody, listing, registration, and trading of securities; management activities of securities companies, fund management companies, investment securities companies; information disclosure activities and other activities related to the securities market as prescribed in the Securities Law.

2. Electronic document in the securities field are data messages about securities business activities created, sent, received, and stored through electronic means in online securities trading activities; electronic information exchange related to public offering of securities, securities custody, listing, registration, and trading of securities; management activities of securities companies, fund management companies, investment securities companies; information disclosure activities and other activities related to the securities market as prescribed in the Securities Law.

3. Electronic order ticket are data messages recording customer orders placed through the online securities trading systemof the securities company where the customer opens a trading accountat a specific time that can only be accessed by the customer through access authentication and order placement.

Article 4. Principles of electronic transactions in the securities sector

1. The implementation of electronic transactions in the securities sector must comply with the principles of clarity, fairness, honesty, safety, effectiveness, and compliance with Article 5 of the Law on Electronic Transactions No. 51/2005/QH11.

2. Organizations providing electronic transaction services in the securities sector must meet the conditions prescribed in Section I.1 Part II of Circular No. 78/2008/TT-BTC on electronic transactions in financial activities.

3. Organizations and individuals using electronic transaction services in the securities sector must meet the conditions prescribed in Section I.2 Part II of Circular No. 78/2008/TT-BTC on electronic transactions in financial activities.

Chapter II
ELECTRONIC SECURITIES TRADING ACTIVITIES

Article 5. Requirements for services

1. Online securities trading service is a service provided by securities companies to investors for opening accounts, placing orders, making requests for securities transactions, or receiving transaction results through the Internet or telephone.

2. Securities permitted to be traded through online services are those traded on the Stock Exchange.

3. Securities companies must establish an electronic information website with a specific address on the Internet serving as an entry point for online trading services.

4. Investors who open an account in accordance with the law on the electronic information site of a securities company may use online trading services after registering and completing necessary legal procedures.

When conducting online securities trading, investors may use electronic order forms, which must meet all standards prescribed in Article 5 of Decree No. 27/2007/NĐ-CP on Electronic Transactions in Financial Activities.

5. Securities companies must directly provide online securities trading services to investors and cannot delegate or hire other unauthorized organizations through service fee arrangements.

6. Securities companies must issue procedures for implementing online trading services in compliance with the Law on Electronic Transactions and sign a written contract with customers clearly defining the legal responsibilities of both parties, including liability for compensation in case of risk. Securities companies must also disclose risks to investors in the form of a "Risk Disclosure Statement" attached to the contract.

7. Securities companies providing online securities trading services must offer alternative trading methods for customers using such services.

8. Securities companies have the responsibility to regularly provide comparison documents regarding electronic transaction activities for investors using online securities trading services.

9. Securities companies shall not provide online securities trading services for transferring financial resources, buying and selling securities on commission.

10. Securities companies must disclose relevant risks on the "Risk Disclosure Statement" on their official electronic information site and client application software. Disclosed risks include the following:

a) During transmission over the Internet, orders may be suspended, delayed, or contain data errors.

b) Identification of organizations or investors may not be accurate, security errors may occur;

c) Market prices and other securities information may have errors or discrepancies;

d) Other risks that securities management agencies and securities companies may deem necessary to disclose.

11. Securities companies participating in online securities trading service business must annotate the effective time or delay time of listed securities price tables when sending them to customers. In cases where securities companies provide securities information to customers, they must disclose the source of the information.

Article 6. Requirements for Information Security and Data Storage

1. Securities companies must store, ensure the integrity, and retain the original form of electronic vouchers, electronic order forms, electronic data, and recordings of customer order placement calls for at least ten years.

2. Securities companies have the responsibility to protect the information of organizations and individuals participating in online trading activities in accordance with the provisions of the law. Securities companies are not permitted to disclose outside information related to account funds, securities, identification information, and other data of investors.

Article 7. Technical Requirements

1. Securities companies must apply technical solutions to ensure that the online securities trading service system is technically isolated from other business systems; use security measures to prevent unauthorized access to the company's internal business systems through online trading activities.

2. Securities companies must technically isolate the storage of data information of investors who have not registered for online trading services from the online securities trading service system.

3. The online securities trading service system must have technical solutions to ensure system safety, backup data storage, and recovery to guarantee the technical safety, completeness, and accuracy of customer data.

4. Securities companies must arrange staff with sufficient qualifications to manage and supervise the activities of the online trading service system. Securities companies must have a team of employees meeting the professional requirements for information technology such as operating system administration, database administration, security techniques, network administration.

5. The online trading service system must have functions or means for real-time management and preventing unauthorized access. Reasonably store daily log information and check the main software backups of the online securities trading service system such as network operating systems, databases, and application software.

6. Customer information using online services, transaction orders, and other sensitive information must be encrypted to ensure security during transmission over the Internet.

7. Securities companies must apply reliable technical or management measures to accurately identify online investors; prevent fraudulent investor access in online securities transactions.

8. Securities companies must apply technical or management measures to establish stock purchase and sale limits according to the law for each investor participating in the online securities trading service.

9. Major technical equipment related to secure data transmission and identification in the online securities trading service system must undergo testing and certification for safety by the competent authority responsible for information technology testing as prescribed by law.

10. To ensure safety and cybersecurity, the use of digital signatures and certificates for applications used for online trading on the Internet by securities companies is regulated as follows:

a) The electronic information website (website), email system of securities companies providing online securities trading services must be verified by a certificate.

b) Securities companies and investors can independently choose to use digital signatures and certificates in online stock buying and selling transactions. It is recommended that investors use public certificates in online stock buying and selling transactions.

11. Securities companies must require solution providers and software application developers for the online trading system to commit to securing the source code of the application software with the securities company.

Article 8. Conditions for Providing Online Securities Trading Services

1. A securities company providing online securities trading services to investors must be a member of the Stock Exchange and must connect to the Stock Exchange's trading system. After connecting to the Stock Exchange's trading system, the securities company shall register to provide online securities trading services with the State Securities Commission.

2. A securities company shall not be approved to provide online securities trading services if it is suspended from operations, or its trading is halted to terminate its membership at the Stock Exchange, or it falls under special supervision by the State Securities Commission.

Article 9. Documents for registering to provide online securities trading services.

The documents for registering to provide online securities trading services include:

1. An application form for registering to provide online securities trading services according to the model prescribed in Appendix 01 of this Circular;

2. A list of names and resumes of system management experts for the company's online securities trading service according to the models prescribed in Appendices 02 and 03 of this Circular;

3. Sample contracts for online securities trading services with customers and Risk Disclosure Statements according to the models prescribed in Appendices 04 and 05 of this Circular;

4. A report on the design of the online securities trading system according to the model prescribed in Appendix 06 of this Circular;

5. A contingency plan for system failures in online securities trading according to the model prescribed in Appendix 07 of this Circular;

6. Certificates of testing regarding the safety and quality of the online securities trading system issued by organizations with functions to test information technology according to the law (certified copies);

7. A risk management plan of the company in implementing online trading services according to the model prescribed in Appendix 08 of this Circular;

8. Technical documentation on network access equipment, network integration equipment, software and hardware systems, and other related equipment according to the model prescribed in Appendix 09 of this Circular;

9. Approval letters and inspection records of the online trading system of the Stock Exchange (certified copies).

Article 10. Procedures for Approving the Provision of Online Trading Services

1. Upon receiving the documents as stipulated in Article 9 of this Circular, within five (05) working days, the State Securities Commission shall issue a written request for the securities company to supplement or explain in writing for cases where the documents are not compliant.

2. Within ten (10) working days from the date of receipt of the State Securities Commission's request, the securities company must submit a written explanation or supplement the documents after receiving comments from the State Securities Commission. If the securities company does not supplement additional documents beyond this period, the State Securities Commission has the right to reject approval.

3. Within thirty-five (35) working days from the date of receiving complete and valid documents, the State Securities Commission will issue a decision approving the provision of online securities trading services. In case of rejection, the State Securities Commission must reply in writing and specify the reasons.

Article 11. Reporting and Information Disclosure System

1. A securities company approved to provide online securities trading services must submit to the State Securities Commission and the Stock Exchange relevant documents and reports related to upgrading and changing the system such as: implementing major upgrades for the operation system of online securities trading services; performing significant repairs for the business management system; or operating a technical system and stock trading principles online at a branch that has not previously provided online trading services. The deadline for submitting the report is a minimum of seven (07) working days after the securities company implements the upgrade or change to the system.

2. A securities company approved to provide online securities trading services must submit an annual report to the State Securities Commission on online securities trading activities before January 31 of the following year according to the model prescribed in Appendix 10 of this Circular.

3. The Stock Exchange is responsible for reporting to the State Securities Commission on the situation of providing online securities trading services to securities companies; reporting on the online trading system before January 31 of the following year according to the model prescribed in Appendix 11 of this Circular.

4. The Stock Exchange is responsible for publishing on its website: a list of securities companies meeting the conditions and permitted to connect to the Stock Exchange's trading system, procedures, and regulations on the registration dossier for becoming a direct trading member of the Stock Exchange.

5. The State Securities Commission is responsible for publishing on its website: a list of securities companies permitted to provide online securities trading services, procedures, and regulations on the registration dossier for providing online securities trading services to customers.

6. The Stock Exchange and securities companies shall submit reports in electronic format using digital certificates and digital signatures as guided by the State Securities Commission.

Article 12. Inspection and Examination

The State Securities Commission (SSC) shall conduct regular or irregular inspections and examinations of stock exchanges and securities companies on their implementation of online securities trading activities as prescribed and when events occur that significantly affect investors' rights and market safety.

Article 13. Revocation of Approval Decisions for Providing Online Securities Trading Services

1. A securities company shall have its Decision approving the provision of online securities trading services revoked in the following cases:

a) It has registered to withdraw its brokerage business and received approval from the SSC.

b) Its brokerage business has been withdrawn.

c) It has been suspended from operations.

d) Its license for establishment and operation has been revoked.

2. A securities company whose Decision approving the provision of online securities trading services has been revoked under Clause 1 of this Article must maintain and store data of the online securities trading system to fulfill obligations as prescribed by law.

3. A securities company whose Decision has been revoked may re-register to provide online securities trading services after addressing the requirements stipulated in Clause 1 of Article 13 of this Circular.

Chapter III
ELECTRONIC INFORMATION EXCHANGE ACTIVITY

Article 14. Provisions on Electronic Information Exchange

1. Electronic information exchange activities refer to the exchange of information through the Internet between market regulatory organizations (including: SSC, Stock Exchanges, Securities Depositories), securities companies, fund management companies, investment securities companies, and users who have registered to use such services.

2. Users registered to use electronic information exchange services can send their own information disclosure data and receive feedback from securities market regulatory authorities through their registered addresses.

3. Users of electronic information exchange services include:

a) Public companies, organizations registering for securities issuance

b) Organizations and individuals conducting securities registration and custody

c) Organizations applying for the establishment of securities companies, fund management companies, investment securities companies.

d) Other related organizations and individuals.

4. Users of electronic information exchange services must submit registration forms and complete other necessary procedures to be able to use any electronic information exchange service on the websites of market regulatory organizations.

5. Market regulatory organizations are responsible for issuing Procedures for electronic information exchange services and, if necessary, signing written contracts with users of these services. These contracts must clearly state the legal responsibilities of both parties and potential risks to customers when using the service provided by the entity.

6. Regulatory agencies must establish an electronic information website on the Internet serving as an entry point for electronic information exchange services.

7. Service providers of electronic information exchange must ensure customer information security.

8. Information and data transmitted through the electronic information exchange system must comply with the conditions specified in Article 4 of Decree No. 27/2007/ND-CP on electronic transactions in financial activities.

9. Procedures for providing electronic information exchange services in the securities sector must comply with the provisions set out in Section V.A.2 Part II of Circular No. 78/2008/TT-BTC on electronic transactions in financial activities.

Chapter IV
IMPLEMENTATION

Article 15. Effective Date

This Circular takes effect from August 15, 2013, and replaces Circular No. 50/2009/TT-BTC dated March 16, 2009, on Guidelines for Electronic Transactions on the Securities Market.

Article 16. Implementation Organization

1. Securities companies that have been approved to provide online securities trading services within six months from the date this Circular takes effect must complete digital certificate requirements for their corporate websites and email systems according to Point a Clause 10 Article 7 of this Circular.

2. The SSC is responsible for issuing specific guidelines on the use of digital signatures in the securities sector. Stock Exchanges and Securities Depositories are responsible for issuing regulations, procedures, and supervising compliance with online trading activities of members after receiving approval from the SSC.

The SSC, Stock Exchanges, Securities Depositories, Securities Companies, Fund Management Companies, Investment Securities Companies, and other related organizations and individuals are responsible for implementing this Circular.

3. Any amendments or supplements to this Circular shall be decided by the Minister of Finance.