3 measures to handle financially unsafe securities trading organizations

Measures to handle securities business organizations that do not meet financial safety criteria include: Warning; control or special control.

This is a regulation in Circular 87/2017/TT-BTC recently issued by the Ministry of Finance, stipulating financial safety indicators and handling measures for securities trading organizations that do not meet financial safety indicators.

Illustration

Regarding warning measures, the Circular clearly states that the State Securities Commission shall decide to put a securities business organization on warning status in the following cases: The available capital ratio is from 150% to less than 180% in all reporting periods for 03 consecutive months; or the available capital ratio has been reviewed or audited by an approved auditing organization from 150% to less than 180%; or the financial safety ratio report in which the approved auditing organization gives an unapproved opinion (or an opposing opinion), refuses to give an opinion (or cannot give an opinion), or gives an exception to some indicators of this report, which if the excluded effects are excluded from the available capital, will lead to an available capital ratio of from 150% to less than 180%.

A securities business organization is removed from warning status when its available capital ratio reaches 180% or more for 03 consecutive months, in which the available capital ratio at the last reporting period must be audited by an approved auditing organization.

Regarding control measures, the State Securities Commission shall decide to place a securities business organization under control in the following cases: The capital adequacy ratio is from 120% to less than 150% in all reporting periods for 03 consecutive months; or the capital adequacy ratio has been reviewed or audited by an approved auditing organization from 120% to less than 150%; or the financial safety ratio report in which the approved auditing organization gives an unapproved opinion (or an opposing opinion), refuses to give an opinion (or cannot give an opinion), or gives an exception to some indicators of this report, which if the excluded effects are excluded from the capital adequacy ratio will result in a capital adequacy ratio of from 120% to less than 150%.

The control period shall not exceed 12 months from the date the securities business organization is placed under control.

A securities business organization is removed from control when its available capital ratio reaches 180% or more for 3 consecutive months, in which the available capital ratio at the last reporting period must be audited by an approved auditing organization.

Special control

According to the Circular, the State Securities Commission shall decide to place a securities business organization under special control in the following cases: The ratio of available capital calculated by the company itself or reviewed and audited by an approved auditing organization is below 120%; or the control status cannot be overcome within the prescribed 12-month period; or the financial safety ratio report is not reported in 02 consecutive reporting periods, or the financial safety ratio report is not audited or reviewed, or the financial safety ratio report is not disclosed, which has been reviewed and audited by an approved auditing organization as prescribed...

The period of special control shall not exceed 04 months from the date the securities business organization is placed under special control.

A securities business organization is removed from special control status when its available capital ratio reaches 180% or more for 03 consecutive months, in which the available capital ratio at the last reporting period must be audited by an approved auditing organization.

After the special control period expires as prescribed, if a securities business organization still fails to overcome the special control situation and has a gross loss (undistributed profit indicator on the balance sheet) reaching 50% or more of its charter capital, its operations will be suspended...

This Circular takes effect from October 10, 2017.

According to chinhphu.vn