Tighten management of foreign securities companies in Vietnam
Circular 91/2013 regulating the operations of foreign securities companies in Vietnam takes effect from November 1, 2013.
Circular 91/2013 of the Ministry of Finance on guidelines for registration of establishment, organization and operation of representative offices of foreign securities business organizations and branches of foreign fund management companies in Vietnam will take effect from November 1, 2013.
According to the Circular, the provisions on registration of representative office activities of foreign securities business organizations; establishment and operation of branches in Vietnam of foreign fund management companies are all specifically and detailedly regulated with strict constraints.
In case of violations, depending on the nature and severity of the violation, foreign securities business organizations will have their representative office registration certificates revoked in the following cases: The parent company or representative office violates regulations on foreign exchange management under Vietnamese law, insider trading, market manipulation and other prohibited transactions under Vietnamese securities law;
Failure to fully perform tax obligations and other financial obligations to the Vietnamese state as prescribed by law; The application for a certificate of registration for representative office operations contains false or inaccurate information or omits important information required to be included in the application;
Operating for the wrong purpose, not in accordance with the functions or not in accordance with the contents specified in the Certificate of registration of representative office activities or other legal regulations on representative office activities; not submitting reports as required by the State Securities Commission;
The parent company ceases operations, goes bankrupt, dissolves, or the parent company is divided, separated, merged, or consolidated, and the organization formed after the division, separation, merger, or consolidation requests to terminate the operations of the representative office in Vietnam; The representative office does not conduct operations within twelve (12) months from the date of issuance of the Certificate of Registration of Operation.
Representative offices of foreign securities companies during their operation are responsible for reporting their activities periodically every quarter and year to the State Securities Commission.
A branch of a foreign fund management company in Vietnam shall temporarily suspend operations for a maximum period of two years in the following cases: Forced to temporarily suspend operations due to failure to overcome the special control status as prescribed by law on financial safety indicators and having a gross loss of less than fifty percent (50%) of charter capital; voluntarily suspend operations, provided that all economic contracts related to securities trading have been liquidated.
Branches in Vietnam shall be suspended from operation if they fail to maintain the conditions for granting licenses to establish and operate branches as prescribed; fail to overcome the special control status after the deadline prescribed by law on financial safety indicators and gross losses reaching fifty percent (50%) or more of charter capital or no longer meet the capital requirements for branch operations./.
According to vov.vn - LT
