SPECIFIC PROVISIONS ON CONDITIONS AND PROCEDURES FOR ESTABLISHING SECURITIES COMPANIES

- A securities company is an organization which is a legal entity dealing in securities business, including securities brokerage, securities dealing, underwriting, securities investment consultancy, financial consultancy services. and other consultancy services in accordance with the provisions of Vietnamese law currently in force.

- Securities practitioners are persons working in specialized positions in securities companies and have securities practice certificates granted by the State Securities Commission.

The conditions for the establishment of securities companies and securities practitioners must comply with the provisions of Vietnamese law currently in force.

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The conditions and procedures necessary to establish a securities company

1. Conditions on infrastructure : (Article 62 of the Law on Securities, Decision No. 27/2007/QD-BTC on the Regulation on organization and operation of securities companies).

- Having head offices meeting the requirements, assurance of security and safety according to current regulations;

- The right to use office space for a minimum of one year, in which the trading floor area for investors is at least 150m2; Having enough infrastructure and technical operations in service of business, including: office equipment, computer systems and software for securities trading, electronic information pages, message boards for information disclosure to customers, the system stockpiles, safes for securities, cash and other valuable assets, and store and preserve documents and transaction vouchers for securities companies engaged in securities brokerage and securities dealing.

- Fire protection system;

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- Security system, safeguard the working office of the company.

2. Capital condition

Having the minimum charter capital contributed by the legal capital level as prescribed in Article 51 of the Government's Decree No. 58/2012/ND-CP detailing the implementation of a number of articles of the Law on Securities

a) Legal capital for business operations of securities companies, foreign-invested securities companies and foreign securities companies in Vietnam:

- Securities brokerage: VND 25 billion;
- Securities dealing: VND 100 billion;
- Securities underwriting: VND 165 billion;
- Securities investment consultancy: VND 10 billion.
- Where an organization applies for a license for many business operations, legal capital is the total legal capital corresponding to each operation proposed for licensing.
- The legal capital of a fund management company in Vietnam and a branch of a foreign fund management company in Vietnam is VND 25 billion.

b) Provisions on individuals contributing capital to establish securities business organizations:

- Being individuals other than those who are not allowed to establish and manage enterprises in Vietnam in accordance with the law on enterprises and have sufficient financial capacity to contribute capital to founding securities business organizations;
- To use only their own capital and prove that they have sufficient financial capacity under the guidance of the Ministry of Finance.

c) Regulations for organizations contributing capital to establish securities business organizations

- Having legal person status and not being in the situation of consolidation, merger, division, splitting, dissolution or bankruptcy and not falling into the cases where enterprises are not allowed to establish and manage enterprises according to the provisions of law on the enterprise;
- The business has been profitable for the last two years and has no accumulated losses. Besides:

+ In the case of commercial banks, insurance enterprises and securities business organizations, they are not in the status of operational control, special control or other warning conditions; At the same time, to fully meet the conditions for participation in capital contribution and investment according to the provisions of specialized law.

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+ In the case of other economic organizations:

  • Having operated for at least 5 consecutive years preceding the year of contributing capital for the establishment of securities business organizations;
  • After subtracting long-term assets, the remaining portion of the owner's capital must be at least equal to the amount of capital to be contributed;
  • Working capital must be at least equal to the capital amount to be contributed.

- Only use the owner's capital and other eligible capital sources according to the specialized law, the audited annual financial statements must be without exception.

3. Conditions on securities practice and securities practitioners: (Article 81 of the Law on Securities)

- Trading in securities is one of the conditional business lines so: Phao has a practice certificate when registering business.

- Securities practitioners are persons working in specialized positions in securities companies and have securities practice certificates granted by the State Securities Commission.

3.1. The conditions necessary and sufficient for the director (general director):

a) Not being a person who has been or is executed for Criminal prosecution, imprisonment or a deprivation of the right to practice according to law provisions;

b) Having never been the legal representative of a bankrupt enterprise, except for cases of bankruptcy due to force majeure;

c) Education and work experience;

- Having university or postgraduate degrees in finance, banking or securities; Professional experience in finance, banking and securities, at least two years of management experience for a maximum of 03 years;

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d / Ensuring the professional ethics in securities business activities;

e) Having a securities practice certificate;

f) Not being a person who has been handled by the State Securities Commission in accordance with the law on securities and securities market within the latest 03 years.

3.2. Conditions for securities practitioners in securities companies

- Securities practitioners are not allowed to:

a / Concurrently working for another organization related to ownership with the securities company where they work;

b / Concurrently working for another securities company;

c / At the same time, to be the director (general director) of a public offering organization or a listing organization.

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- A securities practitioner working for a securities company may only open a securities trading account for himself (if any) at the securities company where he / she works.

- Securities practitioners are not allowed to use money or securities on clients' accounts when they are not entrusted by the clients in writing.

- Securities practitioners must attend training courses on legal documents, trading systems and types of securities issued by the State Securities Commission, the Stock Exchange and the Securities Trading Center.

4. Conditions on dossiers of application for establishment and operation licenses of securities companies:

a) A dossier of application for a license for the establishment and operation of a securities investment company with domestic contributed capital comprises:

1 - Application for establishment and operation license;

2 - A written explanation of the material and technical facilities to ensure the performance of securities business operations, enclosed with the contract of proving the right to use the area as the company's head office;

3 - Minutes of meetings of founding shareholders or founding members or resolutions on the establishment of securities companies; This resolution must include the following contents: Agreed on the establishment of a securities company with specific contents on transaction names in Vietnamese and English, business operations, charter capital, ownership structure and charter; a business plan and establishment of a preparatory board or a representative of a founding shareholder (founding member) to establish a securities company;

4 - The bank's certification of the legal capital amount deposited at the frozen account opened at the bank;

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5 - The expected list of directors or general directors and staff members conducting securities business operations enclosed with copies of securities practice certificates;

6 - List of founding shareholders or founding members, commitment of capital contribution of founding shareholders, founding members and shareholders, other members holding 5% or more of the charter capital of the company. a copy of the identity card or passport for an individual and a business registration certificate for a legal person.

7 - Documents proving the financial capacity and contributed capital of founding founding members of the founding members are as follows:

- A shareholder or a member being a natural person shall have to certify the bank's balance of the deposit balance on the account or the valuer's certification of the value of assets being real estate, securities and other assets. Other property of human beings together with valid copies of documents proving the ownership of such assets.

- A copy of the latest annual financial report must be certified by an independent auditing organization of founding shareholders or a founding member who is a legal person contributing 10% or more of its contributed charter capital. the organization applying for capital contribution;

8. The draft charter of the company has been approved by the founding shareholders, founding members of the securities company;

9- The business plan for the first three years is proposed in line with the proposed business license, accompanied by professional procedures, internal control procedures and risk management procedures as prescribed. of the State Securities Commission

(b) A dossier of application for a license for establishment and operation of a securities company with capital contributed by a foreign party:

1. Provisions like domestic securities companies;

2. The partnership contract for cases where the establishment of a joint-venture securities company or capital contribution is committed in the case of establishment of a securities company with capital contributed by a foreign party;

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3. In cases where a foreign party is a legal entity, the dossier shall have additional documents: a valid copy of the charter, establishment and operation license or business registration certificate or equivalent legal document of the legal entity provided by the country of origin; The decision on the establishment or capital contribution of the establishment of a securities company in Vietnam by a competent authority of a foreign legal person; Audited financial statements;

4. Documents specified in Section 2 must be made in 2 copies, 1 in Vietnamese and 1 in English. The dossier in English must be consular legalized and certified by a Vietnamese notary office;

5. A dossier must be made in two originals with the same validity and sent to the State Securities Commission.

Translated from: Tư vấn thành lập công ty chứng khoán

For more information, please contact: MINH KHUE LAW FIRM CO., LTD

Add: Room 2007, 20th Floor, C2 Building, Vincom Tran Duy Hung, Tran Duy Hung Street, Trung Hoa Ward, Cau Giay District, Hanoi.

Phone to request an establishment of types of company, call: 02439916057

Online legal consultancy office and appointment for a consultation at the office: 1900.6162 (Press 7)

Email: [email protected]

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Look forward to cooperation with clients!

Best regards./.

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