Circular No. 50/2009/TT-BTC dated March 16, 2009 of the Ministry of Finance guiding electronic trading on the securities market

GUIDING ELECTRONIC TRADING ON THE SECURITIES MARKET

Pursuant to the Law on Securities dated 29 June 2006;

Pursuant to the Law on E-Transactions dated 29 November 2005; Pursuant to the Law on Information Technology dated 29 June 2006;

Pursuant to Decree 27/2007/ND-CP of the Government dated 23 February 2007 on electronic transactions
in financial activities ("Decree 27");

Pursuant to Decree 118/2008/ND-CP of the Government dated 27 November 2008 on functions, duties, powers and organizational structure of the Ministry of Finance;

The Ministry of Finance hereby provides the following guidelines on a number of articles of Decree 27:

Section I. GENERAL PROVISIONS

1. Governing scope

This Circular regulates the principles and procedures for conducting electronic trading during online securities trading activities, and for exchanging electronic information relevant to public offers of securities, to securities depository and listing; to administration of securities companies, fund management companies and securities investment companies; and to disclosure and announcement of information and other securities market activities in accordance with the Law on Securities.

2. Applicable entities

The provisions in this Circular apply to the State Securities Commission (SSC), Stock Exchanges (SE), Securities Trading Centres (STC), issuing organizations, listing organizations, securities companies, fund management companies, securities investment companies, public companies, investors and other intermediary organizations choosing to conduct securities trading and securities market activities electronically.

3. Interpretation of terms

3.1. Electronic trading in the securities sector means electronically conducted transactions and electronically provided services in securities and the securities market including public offers of securities, securities depository and listing; administration of securities companies, fund management companies and securities investment companies; and disclosure and announcement of information and other securities market activities in accordance with the Law on Securities.

3.2. E-voucher in the securities sector means a data message about a professional securities activity which is created, sent, received and stored by electronic means in the course of online securities trading; in the course of exchange of electronic information relevant to public offers of securities, securities depository and listing; in the course of administration of securities companies, fund management companies and securities investment companies; and during disclosure and announcement of information and other securities market activities in accordance with the Law on Securities.

3.3. E-order means a data message recording data about a trading order which a client has placed via the data system (of the securities company where such client has opened a trading account) at a specific time when only that client is able to access such system via an access code and order placing code.

4. Principles for electronic trading in the securities sector

4.1. The conduct of electronic trading in the securities sector must comply with the principles on clarity, fairness, truthfulness, safety and effectiveness, and must also comply with article 5 of the Law on E- Transactions.

4.2. Electronic trading service providers in the securities sector must satisfy the conditions stipulated in clause 1.11 of Section II of Circular 78/2008/TT-BTC of the Ministry of Finance dated 15 September 2008 on electronic trading in financial activities ("Circular 78").

4.3. Electronic trading service users in the securities sector must satisfy the conditions stipulated in clause 1.22 of Section II of Circular 78.

Section II. SPECIFIC PROVISIONS

5. Online securities trading activities

5.1. Requirements regarding services

5.1.1 Online securities trading services means services provided by a securities company to investors to open accounts, place orders, provide their requirements regarding securities trading or receive transaction results via the internet or by telephone.

5.1.2 Securities traded on a Stock Exchange shall be permitted to be traded online.

5.1.3 Securities companies must create a website with a fixed address on the internet in order to provide a portal for online trading services.

5.1.4 Any investor opening an account in accordance with law on the website of a securities company may use online trading services after registering and conducting the necessary legal procedures.

Investors may, when conducting online securities trading, use e-orders which satisfy the criteria stipulated in article 5 of Decree 27.

5.1.5 Securities companies may only directly provide online securities trading services for investors in that securities companies are not permitted to authorize or hire other organizations to provide online services by paying the latter service fees.

5.1.6 Securities companies must issue their own Rules on conducting online trading services in conformity with the Law on E-Transactions, and must sign a written contract with clients stipulating the legal liabilities of the two parties including liability to pay compensation when risks eventuate. Securities companies must set out risks relevant to investors in the form of an Announcement of Risks.

5.1.7 Securities companies must store and maintain the original status quo of e-vouchers, e-orders, electronic data and telephone order recordings for at least ten (10) years.

5.1.8 Securities companies must preserve, in accordance with law, confidentiality of information on entities which trade online; and must not disclose, other than on their legitimate business website, programs and systems relevant to monetary accounts, securities and personal information or any other data about investors.

5.1.9 Securities companies providing online trading services must provide a replacement trading method as a back-up for clients who use their services.

5.1.10Securities companies must regularly provide to investors trading online, written documents on their electronic transactions for comparative purposes.

5.1.11Securities companies must not provide online trading services for transferring financial resources or transferring, buying and selling securities on trust [or pursuant to authorization].

5.1.12Securities companies must disclose relevant risks in an Announcement of Risks and provide it on their official website and in application software provided to clients. The Announcement of Risks must state:

(a) [There is a risk] that trading orders may be suspended, delayed or corrupted during internet transmission;

(b) [There is a risk] that identification of organizations or investors may be inaccurate, and errors may occur regarding [protection of] confidentiality;

(c) [There is a risk] that errors may occur or inaccurate information provided about market prices and other information about securities;

(d) Any other risks which the securities administrative body and the securities company consider necessary to announce.

CIRCULAR