✦ Smart summary
This Circular guides the implementation of Decree No. 36/2007/NĐ-CP on administrative penalties for violations in the securities and securities market sector, applicable to organizations and individuals participating in activities on the securities market. It provides detailed regulations on forms of penalties, fine amounts, penalty procedures, penalty authority, and implementation processes.
Scope of application
Vietnamese organizations and individuals, foreign organizations and individuals participating in securities investment and activities on the Vietnamese securities market. Organizations and individuals related to securities and securities market activities.
Key points
- Issuing organizations, Directors or General Managers, Chief Accountants, and related persons of issuing organizations, underwriting organizations, and advisory organizations shall be fined from VND 10,000,000 to VND 70,000,000 if they prepare registration documents for public offering of securities with false or incomplete information.
- The Securities Inspector General and the Chairman of the State Securities Commission have the authority to issue warnings, impose fines up to VND 70,000,000, and apply measures to mitigate consequences for violations.
- The penalty decision must be signed and stamped by the authorized person, sent to the organization or individual being penalized, and published publicly on the website of the State Securities Commission.
- During inspection and examination, upon discovering violations, the Head of the Inspection Team must issue an order to temporarily suspend the violation according to the regulations.
- The competent state management agency must transfer the case file of administrative violations to the State Securities Commission for handling.
🌐 Social impact of this document
- Positive impact: Helps prevent and reduce violations in the securities sector, protecting investors' rights.
- Negative impact: May impose a financial burden on legal costs for organizations and individuals participating in the securities market.
❓ Frequently asked questions
What is the fine for preparing registration documents for public offering of securities with false information?
A fine of VND 10,000,000 to VND 70,000,000.
What is the maximum fine that the Securities Inspector General and the Chairman of the State Securities Commission can impose?
Up to VND 70,000,000.
To whom must the penalty decision be sent?
The organization or individual being penalized and the revenue collection agency.
How does the authorized person issue an order to temporarily suspend the violation during inspection?
The Head of the Inspection Team must issue an order to temporarily suspend the violation according to Article 37 of Decree No. 36/2007/NĐ-CP.
How must the state management agency transfer the case file of administrative violations to the State Securities Commission?
All relevant files and documents must be transferred according to the regulations.
Full text
CIRCULAR
Guidelines for Implementing Certain Provisions of Decree No. 36/2007/NĐ-CP dated March 8, 2007 of the Government on Administrative Sanctions for Violations in the Securities and Securities Market Sector
concerning administrative sanctions for violations in the securities and securities market sector
___________________________________
Pursuant to the Securities Law dated June 29, 2006;
Pursuant to the Ordinance on Handling Administrative Violations dated July 2, 2002;
Pursuant to Decree No. 134/2003/NĐ-CP dated November 14, 2003 of the Government detailing certain provisions of the Ordinance on Handling Administrative Violations dated July 2, 2002;
Pursuant to Decree No. 36/2007/NĐ-CP dated March 8, 2007 of the Government on Administrative Sanctions for Violations in the Securities and Securities Market Sector;
Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;
The Ministry of Finance hereby provides detailed guidelines for certain provisions of Decree No. 36/2007/NĐ-CP dated March 8, 2007 of the Government on Administrative Sanctions for Violations in the Securities and Securities Market Sector as follows:
I. GENERAL PROVISIONS
This Circular applies to units under the Ministry of Education and Training; departments of education and training, education and training divisions; preschool education institutions, general education institutions, regular education institutions, teacher training colleges, college of education, universities, universities, academies, other educational institutions, and related organizations and individuals (hereinafter referred to collectively as agencies and units).
1.1. Scope of Application
These Circulars apply to administrative violations in the securities and securities market sector as prescribed in Decree No. 36/2007/NĐ-CP dated March 8, 2007 of the Government on Administrative Sanctions for Violations in the Securities and Securities Market Sector (hereinafter referred to as Decree No. 36/2007/NĐ-CP).
1.2. Applicability
Vietnamese organizations and individuals, foreign organizations and individuals participating in securities investment and activities in the Vietnamese securities market, and other organizations and individuals related to securities and securities market activities who intentionally or negligently violate laws on securities and the securities market but not to the extent that criminal responsibility should be pursued shall be subject to administrative sanctions as prescribed in Decree No. 36/2007/NĐ-CP and guided herein.
2. Application of Forms of Administrative Sanctions
2.1. Forms of administrative sanctions and measures to remedy consequences are applied according to Article 7 of Decree No. 36/2007/NĐ-CP dated March 8, 2007 of the Government on Administrative Sanctions for Violations in the Securities and Securities Market Sector.
2.2. The decision-maker must base the application of administrative sanctions on the violation in the securities and securities market sector, the form and level of punishment prescribed in Chapter II of Decree No. 36/2007/NĐ-CP and the mitigating and aggravating circumstances prescribed in Article 6 of Decree No. 36/2007/NĐ-CP to decide on the application of the form of sanction, the level of fine, including supplementary sanctions or measures to remedy consequences corresponding to the nature and degree of the violation.
2.3. The application of fines, even when applying mitigating or aggravating circumstances, must not be lower than or exceed the prescribed fine range. Determination of the midpoint of the fine range is carried out according to Article 24 of Decree No. 134/2003/NĐ-CP dated November 14, 2003 of the Government detailing certain provisions of the Ordinance on Handling Administrative Violations.
2.4. For a single administrative violation, only one of the two main forms of punishment, warning or fine, may be applied. Supplementary forms of punishment cannot be applied independently but must be applied together with the main form of punishment.
3. Mitigating Circumstances and Aggravating Circumstances
3.1. Mitigating and aggravating circumstances in the securities and securities market sector are prescribed in Article 6 of Decree No. 36/2007/NĐ-CP.
3.2. Some mitigating and aggravating circumstances are specifically guided as follows:
a) For some mitigating circumstances such as: actively preventing the continuation of the violation, reducing damage; voluntarily remedying consequences; voluntarily compensating for losses caused by the administrative violation; lack of understanding; being dependent materially or spiritually; being incited, drawn in, or coerced, there must be evidence to prove.
b) For aggravating circumstances such as: repeated violations refer to cases where multiple administrative violations in the securities and securities market sector have been committed but were not previously administratively sanctioned; recidivism refers to cases where prior administrative violations in the securities and securities market sector have been committed and administratively sanctioned, but before the time limit for considering it as not having been administratively sanctioned, continue to commit administrative violations in that sector.
II. VIOLATIONS
1. Some violations prescribed in Decree No. 36/2007/NĐ-CP are specifically guided as follows:
1.1. Clause 1 and point a clause 2 Article 9: "Preparing registration documents for public offering of securities containing false information, causing misunderstanding or lacking necessary information as prescribed by law" and "Intentionally publishing false information or concealing the truth," refers to the act of the issuer, Director or General Director, Deputy Director or Deputy General Director, Chief Accountant and persons related to the issuer, guarantor, and advisory organizations preparing, providing inaccurate, incomplete information or concealing the truth about important contents related to the Registration Form for Public Offering, Prospectus, Articles of Association, Resolution of the Shareholders' Meeting approving the issuance plan, or Decision of the Board of Directors, Management Board, or company owner approving the issuance plan, guarantee commitment (if any), and related documents.
1.2. Point b clause 2 Article 9: "Using information outside the Prospectus to solicit the market before being permitted to publicly offer securities," refers to the act of the issuer, Director or General Director, Deputy Director or Deputy General Director, Chief Accountant and persons related to the issuer, guarantor, and advisory organizations using inaccurate information compared to the content in the prospectus to advertise, solicit about securities before being permitted to publicly offer, affecting the price of securities and investors' investment decisions.
1.3. Clause 3, Article 9: "An organization issuing securities, its Director or General Director, Chief Accountant and other related persons of the issuing organization, the guarantor organization, the advisory organization for issuance, the approved auditing organization, the auditor signing the audit report, and organizations or individuals confirming the registration documents for public offering of securities engage in forgery in the registration documents for public offering of securities," refers to intentionally creating false documents regarding important contents related to the Registration Certificate for Public Offering, the prospectus, the charter, the Resolution of the Shareholders' Meeting approving the issuance, or the Decision of the Board of Directors, the Board of Members, or the company's owner approving the issuance plan, and any guarantee commitments (if any), and other related documents. These documents cause misunderstanding and affect the decision on issuing a certificate for public offering of securities by the Securities Commission and investors' investment decisions.
1.4. Point a, Clause 2, Article 10: "Failing to submit the registration documents to the Securities Commission within ninety days from the date of becoming a public company," refers to a company with shares owned by at least one hundred investors, excluding professional securities investors, and with a subscribed capital contribution of ten billion Vietnamese dong or more, failing to submit the public company registration documents to the Securities Commission within ninety days from the date of becoming a public company.
1.5. Point b, Clause 2, Article 10: "The registration documents for public companies submitted to the Securities Commission contain false information or lack necessary information," refers to a public company intentionally or negligently preparing or providing inaccurate, incomplete, or concealing material facts related to the company's charter; business registration certificate; summary information about the business organizational structure, management system, shareholder structure, and the most recent financial report.
1.6. Clause 2, Article 13: "An organization listing, its Director or General Director, Deputy Director or Deputy General Director, Chief Accountant and other related persons of the listing organization, the advisory organization, the approved auditing organization, the auditor signing the audit report, and organizations or individuals confirming the listing documents engage in forgery in the listing documents, causing serious misunderstanding," refers to intentionally creating false documents regarding the Listing Registration Certificate, the prospectus, the charter, the Resolution of the Shareholders' Meeting approving the listing, the consulting contract (if any), and other related documents. These documents seriously affect the decision on granting listing permission by the Stock Exchange or the Securities Trading Center and investors' assessment and investment decisions.
1.7. Clause 1 and Clause 2, Article 14 stipulate that an organization trading securities market outside the Stock Exchange and the Securities Trading Center shall not be allowed to organize a securities trading market.
1.8. Clause 2, Article 18 stipulates that organizing securities trading at a securities company refers to the securities trading of listed securities at the Securities Trading Center must comply with the Trading Regulations of the Securities Trading Center.
1.9. Clause 1, Article 26: Fraud or deception in securities trading on the market is the act of individual or organizational investors implementing specific acts regarding transactions as follows:
a) Directly or indirectly participating in activities to create false information or omitting necessary information causing serious misunderstanding affecting the issuance, listing, trading, securities business, investment, and securities services.
b) Directly participating in the publication of false information aimed at enticing, inciting the purchase or sale of securities or failing to promptly and fully disclose information about events occurring that affect the price of securities on the market.
c) Directly or indirectly participating in price manipulation trading, creating artificial prices for securities, fictitious trading; intentionally providing false documents, forging, distorting documents or destroying transaction documents to deceive, lure customers to buy or sell securities.
1.10. Clause 1, Article 27: Internal trading in securities trading is the act of individual or organizational investors obtaining insider information of value and using it before the information is publicly disclosed to buy or sell for themselves or provide it to a third party to earn illegal commissions from valuable insider information obtained.
1.11. Clause 1, Article 28: Market manipulation in securities trading is the act of individual or organizational investors implementing trading behaviors to make all other investors misunderstand the market, specifically regarding transactions as follows:
a) Creating circular trading, i.e., person A sells to person B, after a round of trading returns to the original seller, but between the sellers and buyers there is no profit, only aiming to make that type of security frequently have buying and selling transactions on the market.
b) Creating trading between the seller and buyer without profit, all trading costs are paid by a third party.
c) Trading to maintain a stable price level (neither increasing nor decreasing on the market) is considered trading aimed at maintaining stability on the market.
d) Trading to create a new closing price or opening price for that type of security on the market.
1.12. Point b Clause 2 Article 33: "Failing to report or reporting untimely when abnormal events that significantly affect financial capability and business operations, securities services occur," refers to the situation where the Stock Exchange, Securities Trading Center, Securities Depository Center, public companies, listed organizations, securities companies, fund management companies, securities investment companies, supervisory banks fail to report or report untimely about abnormal events affecting their financial status, business operations, and provision of securities services, leading to fluctuations in securities prices on the market.
1.13. Clause 1 Article 34: "Delays, evasions, failure to provide complete and timely information, documents, electronic data as requested by the Inspection Team and inspectors," refers to the failure to provide or intentionally delaying the provision of required documents, electronic data as requested by the Inspection Team and inspectors; failing to arrange, or arranging inadequately or improperly personnel responsible for working with the Inspection Team; providing inaccurate information, accounting records, and other required documents; and other delays or evasions as prescribed by law.
2. Other violations shall be implemented according to the provisions of Decree No. 36/2007/NĐ-CP.
III. AUTHORITY AND PROCEDURES FOR ADMINISTRATIVE PENALTIES
1. Authority for Administrative Penalties
1.1. The Chief Inspector of Securities has the authority
a) To issue warnings;
b) To impose a maximum fine of 70,000,000 VND for violations not subject to additional administrative penalties or remedial measures.
1.2. The Chairman of the State Securities Commission has the authority
a) To issue warnings;
b) To impose a maximum fine of 70,000,000 VND;
c) To apply additional administrative penalties and remedial measures as stipulated in Clause 2 and Clause 3 Article 7 of Decree No. 36/2007/NĐ-CP;
d) To impose fines for violations as stipulated in Clause 3, Clause 4 Article 9 and Clause 2 Article 14 of Decree No. 36/2007/NĐ-CP.
1.3. Delegation of Authority for Administrative Penalties
In cases where those authorized to impose administrative penalties as specified in points 1.1 and 1.2 of this clause are absent, they may delegate their authority in writing to their direct deputies to impose administrative penalties. The delegation of authority for administrative penalties must comply with the provisions of Article 36 of Decree No. 36/2007/NĐ-CP and relevant laws on administrative violations.
2. Decision on Administrative Penalties
2.1. The decision on administrative penalties must be signed and stamped by the person authorized to impose administrative penalties.
2.2. In cases where an organization or individual commits multiple types of violations, the person authorized to impose administrative penalties shall issue a single decision on administrative penalties. If multiple organizations or individuals commit administrative violations, the person authorized to impose administrative penalties shall base the decision on the nature and severity of each violation to issue separate decisions for each entity.
2.3. In cases where the form or level of penalty exceeds the authority of the person imposing the penalty, such person shall transfer all case files and documents related to the violation to a higher authority within five working days from the date of completion of the violation file.
The violation file includes:
- Original copy of the administrative violation record;
- Original copy of the administrative penalty decision;
- All relevant files and documents related to the violation;
- Original copy of the record of confiscation of items and means used in the administrative violation (if applicable);
- Any other necessary documents.
2.4. The decision on administrative penalties shall be sent to the organization or individual being penalized, the agency collecting the fine, and published publicly on the website of the State Securities Commission within three working days from the date of issuance of the decision.
3. Suspension of Violations
During inspections and audits, if violations in the securities and securities market sector are discovered, the Head of the Inspection Team must issue a temporary suspension order for administrative violations according to Article 37 of Decree No. 36/2007/NĐ-CP. The Head of the Inspection or Audit Team must immediately report in writing to the Chief Inspector or the Chairman of the State Securities Commission to issue a decision suspending the violation.
4. Transfer of Cases to Authorities with Authority to Impose Administrative Penalties
4.1. Government agencies during inspections, audits, and investigations, if they discover administrative violations in the securities and securities market sector but it is outside their authority to impose penalties, must transfer all case files and propose handling in writing to the State Securities Commission for resolution.
The file includes: original copy of the administrative violation record, relevant documents, data, evidence... collected during inspections, audits, and investigations related to administrative violations in the securities and securities market sector.
4.2. In cases where administrative violations in the securities and securities market sector are transferred to the State Securities Commission, the State Securities Commission is responsible for accepting all files and documents related to the administrative violation case and will handle it as follows:
a) In cases where the files, documents, and records of the administrative violation case transferred do not comply with the procedures stipulated in Article 38 of Decree No. 36/2007/NĐ-CP and this Circular, return the files and documents to the agency that issued the administrative violation record and request corrections and supplements. The deadline for returning files requiring corrections and supplements is fifteen working days from the date of the letter transferring the files.
b) In cases where the files, documents, and evidence are insufficient to impose administrative penalties, the inspection and audit team shall verify and supplement evidence and issue a decision on administrative penalties if sufficient grounds are found to prove and conclude the administrative violation.
5. Transfer of Violation Files for Monitoring Compliance with Penalty Decisions
After the Inspector General, Chairman of the State Securities Commission issues the administrative penalty decision, the inspection team, inspection and audit officers must transfer the penalty decision, violation files, and other related documents to the competent department for monitoring the enforcement of the penalty decision.
6. Procedure and process for imposing administrative penalties
When imposing administrative penalties in the securities and securities market sector, the authorized authority to impose penalties must strictly follow the procedure and process for imposing administrative penalties as prescribed in the Administrative Violation Handling Ordinance dated July 2, 2002, Decree No. 134/2003/NĐ-CP dated November 14, 2003 of the Government detailing certain provisions of the Administrative Violation Handling Ordinance, Decree No. 36/2007/NĐ-CP dated March 8, 2007, and the guidelines in this Circular.
IV. IMPLEMENTATION
1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.
2. The State Securities Commission shall guide and direct the Securities Inspectorate to thoroughly understand and strictly implement the regulations on imposing administrative penalties.
3. During the implementation process, if there are difficulties or obstacles, they should be promptly reflected to the Ministry of Finance for consideration and resolution./.
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44/2002/PL-UBTVQH10
Pháp lệnh số 44/2002/PL-UBTVQH10 Xử lý vi phạm hành chính
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70/2006/QH11
Luật Chứng khoán số 70/2006/QH11
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36/2007/NĐ-CP
Nghị định số 36/2007/NĐ-CP Về xử phạt vi phạm hành chính trong lĩnh vực chứng khoán và thị trường chứng khoán
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134/2003/NĐ-CP
Nghị định số 134/2003/NĐ-CP Quy định chi tiết thi hành một số điều của Pháp lệnh Xử lý vi phạm hành chính năm 2002
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77/2003/NĐ-CP
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06/2008/NQ-HĐND
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97/2007/TT-BTC
Circular No. 97/2007/TT-BTC guiding the implementation of certain provisions of Decree No. 36/2007/NĐ-CP dated March 8, 2007.
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