Circular No. 95/2020/TT-BTC on guiding the supervision of securities transactions on the securities market

 

CIRCULAR

GUIDELINES FOR MONITORING SECURITIES TRANSACTIONS ON THE SECURITIES MARKET

On the basis of Securities Law November 26, 2019;

Decree No. 87/2017/NĐ-CP July 26, 2017 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 to guide the supervision of securities transactions on the securities market.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the activities of monitoring listed securities transactions and registered securities transactions on the securities market.

Article 2. Applicability

This Circular applies to the following supervisory subjects and supervised objects:

1. Supervisory Subjects:

a) State Securities Commission;

b) Vietnam Stock Exchange;

c) Subsidiaries of the Vietnam Stock Exchange including the Hanoi Stock Exchange and the Ho Chi Minh City Stock Exchange (hereinafter referred to collectively as the Stock Exchanges);

đ) Trading members (excluding special trading members on the derivatives market and government bond market).

2. Supervised Objects are organizations and individuals participating in the transaction process and providing services related to securities transactions on the securities market, including:

a) Listed organizations, organizations registered for trading;

b) Trading members, special trading members;

c) Members of the Vietnam Securities Depository and Central Counterparty Corporation including depositary members and clearing members;

d) Securities investment fund management companies, securities investment funds, securities companies;

e) Investors participating in securities transactions;

g) Supervisory banks, commercial banks providing services for opening securities investment deposit accounts;

h) Other relevant entities.

In this Circular, the following terms shall be understood as follows:

1. Securities Transactionmeans the buying and selling of securities through the securities trading system of the Stock Exchanges.

2. Abnormal Transactionrefers to transactions that meet the warning criteria of the monitoring criteria system issued by the Vietnam Stock Exchange.

3. Suspicious Transactionrefers to abnormal transactions analyzed and determined by the Stock Exchanges to be transactions suspected of affecting the price and volume of one or more securities during a certain period, with the potential to violate securities transaction laws.

4. Violative Transactionrefers to transactions identified by the State Securities Commission as violating securities transaction laws.

5.Monitoring Report Indicators applicable to trading membersrefer to contents established and guided by the Vietnam Stock Exchange for trading members to implement securities transaction monitoring activities.

6. Rumor refers to information that is true or not true, without evidence to verify at the time of dissemination, related to listed organizations, organizations registered for trading, securities, or securities transactions occurring on the securities market.

Chapter II

ORGANIZATION OF SECURITIES TRANSACTION SUPERVISION

Section 1

STATE SECURITIES COMMISSION'S SUPERVISION OF SECURITIES TRANSACTIONS

1. Monitor securities trading activities on the securities market to detect, prevent, and handle acts of using insider information in securities trading, manipulating the securities market, and other violations of laws governing securities trading.

2. Require monitored entities to report, explain, provide information, and submit documents related to securities trading.

3. Supervise investors in their compliance with laws governing securities trading.

4. Issue warnings for transactions and behaviors that show signs of violating the law to prevent such violations in securities trading by monitored entities.

5. Approve criteria for monitoring securities trading, reporting indicators for securities trading monitoring applicable to members established by the Vietnam Stock Exchange; Approve position limits applicable to derivative markets; methods for calculating margin requirements, monitoring thresholds for margin usage ratios or frequency of required margin deposits as established by the Vietnam Securities Depository and Central Counterparty Corporation.

6. Issue regulations on cooperation in monitoring securities trading between the State Securities Commission, the Vietnam Stock Exchange, subsidiaries, the Vietnam Securities Depository and Central Counterparty Corporation, and trading members.

7. Lead and coordinate with relevant units in inspecting and supervising securities trading activities and services related to securities trading.

8. Report to the Ministry of Finance on the results of securities trading supervision work upon request from the Ministry of Finance.

The content of monitoring by the State Securities Commission includes:

1. Based on reports from trading members, the Vietnam Stock Exchange, subsidiaries, the Vietnam Securities Depository and Central Counterparty Corporation, and results of monitoring at the State Securities Commission, and other sources of information, the State Securities Commission conducts analysis to clarify signs of violations of laws governing securities and the securities market in suspicious transactions to take preventive and handling measures as prescribed.

2. Monitor the activities of the Vietnam Stock Exchange and subsidiaries in organizing and supervising securities trading in each market area under their management and operation as stipulated in Section 2 of this Chapter.

3. Monitor the activities of the Vietnam Securities Depository and Central Counterparty Corporation in managing position limits applied to the derivative securities market, monitoring margin usage ratios or required margin deposits as stipulated in Section 3 of this Chapter.

4. Lead and coordinate with the Vietnam Stock Exchange, subsidiaries, trading members, and the Vietnam Securities Depository and Central Counterparty Corporation to analyze and clarify transactions that may impact the securities market, ensuring the rights and legitimate interests of investors, and maintaining market stability.

5. Monitor the provision of services related to securities trading by entities specified in points b, c, d, đ, g, h of Clause 2, Article 2 of this Circular.

Article 6. Methods for Securities Commission's supervision of securities transactions

1. Supervision of securities transactions based on information from the following sources:

b) Reports from listed organizations and organizations registered for trading;

c) Reports and information reflecting the activities of organizations and individuals participating in securities transactions on the securities market;

d) Information from mass media and rumors related to securities transactions;

đ) Other information sources.

Section 2

SUPERVISION OF SECURITIES TRANSACTIONS BY THE VIETNAM STOCK EXCHANGE AND ITS SUBSIDIARIES

1. Rights and obligations of the Vietnam Stock Exchange

a) Issuing operational rules for implementing securities transaction supervision after approval by the Securities Commission; establishing supervisory procedures to ensure effective supervision;

b) Being responsible for overall supervision of securities trading activities on the securities market;

c) Issuing supervisory criteria for securities transactions applicable to subsidiaries, and reporting standards for trading members;

d) Reporting to the Securities Commission the results of securities transaction supervision work.

2. Rights and obligations of subsidiaries of the Vietnam Stock Exchange

a) Directly supervising securities trading activities in each assigned market area;

b) Establishing a database system to serve securities transaction supervision as stipulated in Article 11 of this Circular;

c) Monitoring daily, multi-day, and periodic transaction trends; analyzing, evaluating, and being responsible for identifying suspicious transactions that may violate securities trading laws;

d) Reviewing information from mass media and rumors related to abnormal transactions;

đ) Supervising the disclosure of information and reporting systems according to current regulations related to securities transactions of trading members, listed organizations, organizations registered for trading, fund management companies, investment funds, securities companies, and investors;

e) Reporting to the Vietnam Stock Exchange for handling trading members who violate trading rules, and recommending the Securities Commission to handle violations of securities trading laws;

3. In addition to the rights and obligations mentioned above, the Vietnam Stock Exchange and its subsidiaries have the following rights and obligations:

a) Supervising the supervision activities of trading members;

b) Requesting organizations and individuals related to securities transactions to provide explanations and information to support securities transaction supervision;

c) Preparing and submitting to the Securities Commission regular transaction supervision reports, unusual transaction supervision reports, and reports requested in relation to securities transaction supervision as stipulated in Articles 13, 14, and 15 of this Circular;

d) Cooperating with the Securities Commission to conduct unusual checks on activities that may violate securities and securities market laws;

đ) Cooperating with the Vietnam Securities Depository and Central Depository Corporation to ensure safe and efficient securities trading, settlement, and payment activities.

Article 8. Content of Securities Trading Supervision

a) Acts of using insider information in buying and selling securities;

b) Acts of manipulating the securities market;

c) Other violations of securities trading laws as prescribed by law.

2. Supervise trading activities, information disclosure, and reporting related to listed securities trading, registered trading of listed organizations, registered trading organizations, trading members, securities investment fund management companies, securities investment funds, securities companies, major shareholders, groups of persons holding five percent or more of the voting shares of public companies, public securities companies; investors, groups of persons holding five percent or more of the fund certificates of closed-end funds; groups of foreign investors holding five percent or more of the voting shares of an issuing organization or five percent or more of the fund certificates of closed-end funds, insiders and related parties to insiders and other subjects of listed organizations, registered trading organizations, insiders of listed closed-end investment funds and related parties, authorized information disclosure entities, and investors in accordance with current regulations.

3. Supervise self-purchase of shares, public tender offers, and other transactions of listed organizations, registered trading organizations in accordance with securities and securities market laws.

1. The Vietnam Stock Exchange shall establish and promulgate a system of criteria for supervising listed and registered trading securities at its subsidiaries, inter-market trading supervision criteria (interaction between the underlying securities market and the derivatives securities market and vice versa; between underlying securities trading activities and guaranteed warrant trading activities and vice versa) to serve as a basis for conducting intra-day and multi-day trading supervision; issue trading supervision reporting indicators applicable to trading members.

2. The supervision criteria system includes specific contents and parameters; trading supervision reporting indicators applicable to trading members need to be reviewed and evaluated periodically.

Article 10. Methods of Securities Trading Supervision

1. The Vietnam Stock Exchange implements supervision through reports from the Vietnam Stock Exchange.

2. The Stock Exchange conducts real-time supervision on its monitoring system for intra-day trading of listed securities and registered trading securities to detect suspicious transactions.

3. The Stock Exchange conducts multi-day securities trading supervision based on one or more of the following sources:

a) Securities trading database;

b) Reports and information disclosures of trading members, listed organizations, registered trading organizations, and investors published in accordance with securities and securities market laws;

d) Information from mass media, rumors related to securities and the securities market;

đ) Other information sources.

Article 11. Database System for Securities Trading Supervision

The Stock Exchange shall be responsible for establishing a database system to serve securities trading supervision work. The minimum contents of the database system must include the following:

1. Data on the results of securities transactions conducted at the Stock Exchange.

2. Lists and information about entities within the scope of supervision by the Stock Exchange that have violated securities laws and regulations, and the Stock Exchange's rules.

3. Reports and information related to securities transactions published through the Stock Exchange’s information disclosure system; reports and information reported to the State Securities Commission and the Vietnam Stock Exchange.

4. Data related to investors' securities trading accounts.

5. Other data related to securities trading activities.

Article 12. Supervision of Trading Members

1. Require trading members to report, explain, and provide relevant information materials concerning securities trading supervision activities in the market area they manage and operate.

2. In case of discovering signs of violation, the Stock Exchange shall be responsible for reporting to the Vietnam Stock Exchange for handling or recommending the State Securities Commission to handle according to its authority, and simultaneously reporting to the Vietnam Stock Exchange.

3. If the Vietnam Stock Exchange discovers signs of violation, it shall handle according to its authority and report the results of such handling to the State Securities Commission.

4. The Vietnam Stock Exchange shall recommend the State Securities Commission to handle violations committed by trading members when such actions exceed its authority.

1. Within the first two working days of the following week, the Stock Exchange shall be responsible for submitting to the State Securities Commission a weekly trading supervision report, including:

a) Securities transaction data comprising: order books, matched orders, negotiated transaction books for underlying securities, derivatives, and other securities traded on the market during the reporting week based on the actual status of the Stock Exchange's trading system. Market-wide securities transaction information managed and operated according to legal provisions on information disclosure in the securities market, excluding information related to the open interest (OI) of each type of derivative security.

b) Results of weekly securities trading supervision work, information on the weight of component stocks in the basket index reflecting market conditions to serve the compilation and evaluation of market trends according to Model No. 01 stipulated in Appendix I issued together with this Circular.

2. Within the first ten working days of the following month, based on the reports from subsidiaries, the Vietnam Stock Exchange shall be responsible for submitting to the State Securities Commission a monthly trading supervision report according to Model No. 02 stipulated in Appendix I issued together with this Circular, including the following main contents:

- Organization of operations and results of implementing securities trading supervision work in business activities;

- Results of securities trading supervision by the Vietnam Stock Exchange and subsidiaries regarding abnormal transactions and the situation of handling such abnormal transactions;

- Results of supervising trading members and the situation of handling violations by trading members;

- Results of implementing abnormal trading supervision reports and reports as required during the reporting period;

- Recommendations (if any).

3. Within the first twenty working days of the following year, based on the reports from subsidiaries, the Vietnam Stock Exchange shall be responsible for submitting to the State Securities Commission an annual trading supervision report according to Model No. 03 stipulated in Appendix I issued together with this Circular, including the following main contents:

- Organization of operations and results of implementing securities trading supervision work in business activities;

- Results of securities trading supervision by the Vietnam Stock Exchange and subsidiaries regarding abnormal transactions and the situation of handling such abnormal transactions;

- Results of supervising trading members and the situation of handling violations by trading members;

- Results of implementing abnormal trading supervision reports and reports as required during the reporting period.

4. The reports prescribed in Clauses 1, 2, and 3 of this Article shall be prepared in both document form and electronic data file format. Specifically, the report prescribed in Point a Clause 1 of this Article only needs to be submitted in electronic data file format. These reports shall be submitted in electronic data file format if the State Securities Commission, the Vietnam Stock Exchange, and subsidiaries all apply electronic signature programs. The Vietnam Stock Exchange and subsidiaries shall be responsible for retaining reported information in accordance with legal provisions.

1. The Stock Exchange shall be responsible for sending the State Securities Commission reports on monitoring abnormal transactions when detecting suspicious transactions within twenty-four (24) hours from the time the Stock Exchange completes its analysis of abnormal transactions, and simultaneously report to the Vietnam Stock Exchange.

2. For the reports on monitoring abnormal transactions mentioned in Clause 1 of this Article, the Stock Exchange shall be responsible for preparing separate analytical reports for each case, clearly stating the suspicious signs, related information, evaluation opinions, and proposed handling measures within its authority, or recommending handling measures in cases exceeding its authority.

3. The method of sending and receiving reports on monitoring abnormal transactions shall be carried out in accordance with the provisions of Clause 4 of Article 13 of this Circular.

Article 15. Reports on Monitoring Transactions Upon Request

2. The reports sent to the State Securities Commission as stipulated in Clause 1 of this Article must be presented in both written form and electronic data file format according to the content and deadline required by the State Securities Commission.

SUPERVISION OF THE VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION

1. Supervise the implementation of contents regarding settlement, position limits, and margin requirements for securities transactions as prescribed.

6. Handle cases of violation within its authority, and report to the State Securities Commission for handling in accordance with the law in cases exceeding its authority.

7. Prepare and send to the State Securities Commission periodic monitoring reports, abnormal monitoring reports, and monitoring reports upon request as prescribed in Articles 20, 21, and 22 of this Circular.

1. Supervision of members of the Vietnam Securities Depository and Central Counterparty Corporation in implementing business activities related to securities settlement and payment in accordance with laws on securities and the securities market.

3. Supervision of investor position limits when participating in derivatives securities trading.

1. The Vietnam Securities Depository and Central Counterparty Corporation shall establish and promulgate regulations on position limits, implement position limit supervision for each investor account, define monitoring thresholds for margin usage or required margin deposits, and their submission timeframes and methods for investors participating in derivatives securities trading; define submission timeframes and methods for required margin deposits and supervision according to clearing members for the underlying securities market in operational rules after approval by the State Securities Commission.

2. The contents and monitoring thresholds must be defined and adjusted periodically to suit market conditions and ensure effective supervision at the Vietnam Securities Depository and Central Counterparty Corporation.

3. Supervision of cases violating settlement and transaction payment regulations; position limit regulations for the derivatives securities market; margin usage ratio or required margin deposit regulations for investors based on one or more sources of data and information including:

a) Data on positions and clearing margins of clearing members and investors;

b) Periodic reports and information reflecting from members of the Vietnam Securities Depository and Central Counterparty Corporation and other entities participating in the derivatives securities market;

c) Information from mass media sources;

d) Other sources of information.

4. Requesting supervised members of the Vietnam Securities Depository and Central Counterparty Corporation to provide information and explanations to clarify any unusual signs as stipulated in Clause 02, Article 16 of this Circular.

5. Cooperating with the State Securities Commission to conduct regular or extraordinary inspections of entities within the scope of supervision by the Vietnam Securities Depository and Central Counterparty Corporation.

The Vietnam Securities Depository and Central Depository Corporation shall be responsible for fully storing information about:

1. Securities settlement and payment data on the securities market.

4. Off-system transaction data.

5. Violation and violation handling data for settlement and payment activities, position limits, and clearing margins of clearing members.

1. By no later than 16 hours 30 minutes on the trading day, Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for sending the State Securities Commission the end-of-day open position volume information for each type of derivative securities according to Model No. 01 stipulated in Appendix II issued together with this Circular.

2. Within the first two working days of the following week, Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for sending the State Securities Commission the weekly transaction supervision report according to Model No. 02 stipulated in Appendix II issued together with this Circular, including the following contents:

a) Report on error correction, error handling, delayed payment, and payment cancellation;

b) Statistics on securities transfer of ownership outside the stock exchange trading system: public tender offer contents as prescribed by law; transfer of ownership from the lending party to the borrowing party and vice versa (except for cases where borrowing is to support securities transaction settlement due to temporary shortages caused by error correction by a depository corporation member of Vietnam Securities Depository and Central Counterparty Corporation, and to support ETF fund contributors with sufficient securities to participate in ETF portfolio swap transactions); transfer of ownership of collateral securities from the borrowing party to the lending party when the borrower loses the ability to repay the loan; transfer of ownership resulting from collateral security asset disposal in pledge, mortgage, margin lending transactions, and other transfers of ownership after obtaining the State Securities Commission's approval;

c) Report on investor securities trading account information, opening, closing, and changes made at securities companies;

d) List of major shareholders of companies registered with Vietnam Securities Depository and Central Counterparty Corporation.

3. Within the first ten working days of the following month, Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for submitting monthly periodic reports according to Model No. 03 stipulated in Appendix II issued together with this Circular, including the following information:

a) Report on violation handling activities against members of Vietnam Securities Depository and Central Counterparty Corporation;

b) Report on supporting defaulting clearing members;

c) Report on issuance of security codes;

d) Report on total margin value and margin collateral asset portfolio of the entire market on a daily basis;

đ) Statistical report on violations of margin collateral usage ratio or daily margin requirement payments by clearing members for the derivative securities market.

4. The periodic reports specified in Clauses 1, 2, and 3 of this Article shall be prepared in both written form and electronic data file format (with electronic signature program application). Specifically, for the reports specified in Clause 2 and points d, đ of Clause 3 of this Article, electronic data transmission method shall be applied. Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for retaining reported information in accordance with legal regulations.

Article 21. Unusual Supervision Reports

2. Unusual reports submitted to the State Securities Commission shall be in the form of written documents and electronic data files within twenty-four (24) hours from the time the Vietnam Securities Depository and Central Depository Corporation discovers the matter.

Article 22. Supervision Reports upon Request

2. The reports sent to the State Securities Commission as stipulated in Clause 1 of this Article must be presented in both written form and electronic data file format according to the content and deadline required by the State Securities Commission.

Section 4

SUPERVISION OF TRADING MEMBERS

Article 23. Obligations and Responsibilities of Trading Members

2. Monitoring the daily and multi-day trading activities of investors who open accounts or conduct transactions at places where trading members provide services.

3. Monitoring compliance with laws and regulations regarding securities trading by individuals and organizations that open accounts or engage in transactions at places where trading members provide trading services.

4. Updating and retaining complete investor profile records, detailed and accurate documentation reflecting each investor's and member's transactions.

5. Cooperating in implementing supervisory work:

b) Cooperating with the State Securities Commission in inviting investors to meet with inspection and audit teams of the State Securities Commission concerning abnormal transactions and transactions suspected of violating securities and stock market laws;

Article 24. Storage of transaction monitoring data

Trading members are responsible for storing securities transaction monitoring data, which must include at least the following information:

1. Data on securities trading activities conducted at the location where the trading member provides services.

2. Information about investors who open accounts or trade at the location where the trading member provides trading services.

3. Data related to margin trading and other financial services provided at the location where the trading member provides trading services.

4. Other data related to securities trading activities conducted at the location where the trading member provides trading services.

Article 25. Reporting of Transaction Monitoring by Trading Members

2. Trading members are responsible for submitting extraordinary transaction monitoring reports and reports upon request to the State Securities Commission.

3. The content, method, and form of preparing and transferring transaction monitoring reports by trading members shall be carried out in accordance with the regulations of the Vietnam Stock Exchange.

Chapter III

OBLIGATIONS OF MONITORING OBJECTS

Article 26. Obligations to Provide Information and Explain According to Requests from Organizations and Individuals Participating in Securities Trading and Providing Securities Trading Services

3. Commercial banks providing services to open investment securities account for investors are responsible for providing information on customer's account balances as requested by the State Securities Commission and competent authorities as prescribed by law.

4. Supervisory banks are responsible for providing data related to investment and securities trading activities of securities investment funds supervised by the bank as requested by the State Securities Commission and competent authorities as prescribed by law.

5. In case organizations and individuals participating in securities trading and providing securities trading services do not cooperate with relevant agencies and organizations as stipulated in Clause 1 of this Article, they will be handled according to the provisions of the law.

Chapter IV

IMPLEMENTING PROVISIONS

Article 27. Implementation Provisions

1. This Circular takes effect from January 1, 2021.

2. From the date this Circular takes effect, Circular No. 115/2017/TT-BTC dated October 25, 2017, issued by the Minister of Finance guiding securities transaction monitoring on the securities market (hereinafter referred to as Circular No. 115/2017/TT-BTC), and Point 1 of Circular No. 35/2019/TT-BTC dated June 12, 2019, issued by the Minister of Finance amending and supplementing some articles of Circular No. 115/2017/TT-BTC dated October 25, 2017 guiding securities transaction monitoring on the securities market and Circular No. 116/2017/TT-BTC dated October 25, 2017 guiding the State Securities Commission's compliance supervision work in the securities sector of the Vietnam Stock Exchange and the Vietnam Securities Depository (hereinafter referred to as Circular No. 35/2019/TT-BTC) shall cease to be effective.

3. The Hanoi Stock Exchange, Ho Chi Minh City Stock Exchange, and the Vietnam Securities Depository continue to monitor securities transactions until the Vietnam Stock Exchange and the Vietnam Securities Depository and Central Counterparty Corporation operate under the Securities Law No. 54/2019/QH14.

4. The Vietnam Securities Depository and Central Counterparty Corporation will supervise margin trading activities for securities market settlement members after the Ministry of Finance officially decides to implement securities settlement operations under the central counterparty mechanism.

Article 28. Implementation Organization

1. The State Securities Commission, the Vietnam Stock Exchange, the Hanoi Stock Exchange, the Ho Chi Minh City Stock Exchange, the Vietnam Securities Depository and Central Counterparty Corporation, trading members, members of the Vietnam Securities Depository and Central Counterparty Corporation, listed organizations, organizations registering for trading, fund management companies, investment funds, securities investment companies, and related organizations and individuals are responsible for implementing this Circular.

2. During implementation, in case of difficulties, organizations and individuals are advised to promptly reflect them to the Ministry of Finance for research and appropriate amendments and supplements.