THE GOVERNMENT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 36/2007/ND-CP
Hanoi, March 8, 2007
 
DECREE
ON PENALTIES FOR ADMINISTRATIVE OFFENCES IN SECURITIES AND SECURITIES MARKET SECTOR
THE GOVERNMENT
Pursuant to the Law on Organization of the Government dated 25 December 2001; Pursuant to the Law on Securities dated 29 June 2006;
Pursuant to the Ordinance on Dealing with Administrative Offences dated 2 July 2002;
On the proposal of the Minister of Finance;
DECREES:
Chapter I

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GENERAL PROVISIONS
Article 1. Governing scope
1. This Decree regulates penalties for administrative offences in the securities and securities market sector, forms of penalty, measures for remedying consequences, levels of fines, and authority and procedures for imposing penalties.
2. Administrative offences in the securities and securities market sector comprise:
(a) Breaches of provisions on making public offers of securities;
(b) Breaches of provisions on public companies;
(c) Breaches of provisions on securities listing;
(d) Breaches of provisions on organization of the securities trading market;
(dd) Breaches of provisions on securities business operations and securities business practising certificates;
(e) Breaches of provisions on securities trading;

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(g) Breaches of provisions on securities registration, depository, clearance and payment; and on custodian banks;
(h) Breaches of provisions on disclosure of information;
(i) Breaches of provisions on reporting;
(k) Breaches of provisions regarding hindering an investigation.
Article 2. Applicable entities
Any domestic or foreign organization, body or individual (hereinafter all referred to as any entity) who breaches the provisions of the law on securities and securities market but not to the level justifying criminal prosecution shall be dealt with for an administrative breach in accordance with the provisions of this Decree, unless an international treaty of which the Socialist Republic of Vietnam is a member contains other provisions in which case the provisions of such treaty shall apply.
Article 3. Principles for imposing penalties for administrative offences
1. The principles for imposing penalties for administrative offences in the securities and securities market sector shall be implemented in accordance with article 3 of the Ordinance on Dealing with Administrative Offences.
2. After an organization is dealt with for an administrative offence which it committed, it must comply with the penalty decision and then identify the individual in such organization whose fault caused the breach in order to determine the legal and financial responsibilities of such individual pursuant to law.
Article 4. Time-limit for imposing penalties for administrative offences

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1. The time-limit for imposing a penalty for an administrative offence in the securities and securities market sector shall be two years as from the date the offence was committed. At the expiry of this time-limit, measures for remedying consequences as stipulated in article 7.3 of this Decree shall still apply.
2. If an individual who commits an administrative offence in the securities and securities market sector is investigated for criminal responsibility, or sued or prosecuted and thereafter there is a decision suspending such investigation or case, then the individual shall be dealt with administratively pursuant to the provisions of this Decree. The person issuing the decision to suspend the investigation or case shall forward a copy of such decision to the person authorized to deal with administrative offences. In such circumstances the statutory time-limit for imposing an administrative penalty shall be three months as from the date of receipt of the decision on suspension of the former investigation or case by the person authorized to deal with administrative offences.
3. If within the time-limits stipulated in clauses 1 and 2 of this article any entity commits a new administrative offence in the securities and securities market sector, or intentionally evades or obstructs being dealt with, then the time-limits stipulated in clauses 1 and 2 of this articles shall not apply but time shall commence to run as from the date the new offence was committed or as from the date the act of evasion or obstruction ceased.
Article 5. Period after which a penalty shall be deemed not to have been imposed
If any entity commits an administrative offence and at the expiry of a period of one year from the date of complete compliance with a penalty decision or from the date of expiry of effectiveness of the penalty decision such offender does not commit a repeat offence, it shall be deemed that the entity was not subject to a penalty for any administrative breach.
Article 6. Mitigating and aggravating circumstances
When imposing a penalty for an administrative offence in the securities and securities market sector, the following shall be regarded as mitigating or aggravating circumstances:
1. The following shall be deemed to be mitigating circumstances:
(a) The offender has taken steps to prevent or mitigate the impact of the breach or has voluntarily redressed its consequences or paid compensation for loss and damage;
(b) The offender has voluntarily confessed the offence and sincerely repented;

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(c) The offence was committed under compulsion or during spiritual or material dependency;
(d) The offence was committed due to a lack of understanding;
(dd) The offence was committed as a result of the offence of another person.
2. The following shall be deemed to be aggravating circumstances:
(a) The offence was pre-organized;
(b) The offender has committed a number of offences or has repeatedly committed the same offence in the same sector;
(c) The offender forced a person materially or spiritually dependent on the offender to commit the offence;
(d) The offender took advantage of his or her official position or powers to commit the offence;
(dd) The offence was committed while the offender was subject to an administrative penalty decision;
(e) The offender committed the breach in spite of a request from an authorized person to desist;

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(g) The offender took further action to evade or cover-up the administrative breach.
Article 7. Forms of penalty, measures for remedying consequences
1. An offending entity must be subject to one of the following two main forms of penalty for each administrative offence:
(a) A warning;
(b) A fine.
2. Depending on the nature and seriousness of the breach, the offending entity may also be subject to one or more additional penalties as follows:
(a) Confiscation of the entire revenue earned from the breach and of the number of securities used to commit the breach;
(b) Suspension for a fixed period or rescission of the public securities issue tranche, if after forty (40) days from the date of the breach the deficiency is not remedied;
(c) Revocation for a limited or unlimited period of the certificate for the public issue of securities, or of the licence for establishment and operation of the securities company, securities investments fund management company, or securities investment company; of the licence for registration of securities depository activities; or of the securities business practising certificate. During the period of revocation of the right to use any of the aforementioned documents, the entity shall not be permitted to conduct any professional operation as stipulated in the relevant certificate, licence or practising certificate.
3. An offending entity may, in addition to being subject to the main penalty and additional penalties as stipulated in clauses 1 and 2 of this article, and depending on the nature and seriousness of the breach, also be subject to one or more of the following measures in order to remedy consequences of the breach:

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(a) Compulsory compliance with law;
(b) Compulsory rescission or correction of incorrect or false information;
(c) Compulsory recovery by the issuing organization of the securities which were offered for sale, and refund of deposits or money paid for the securities by investors within a period of thirty (30) days as from the date of revocation of the right to use the certificate registering the public issue of securities.
Article 8. Applicability of laws in other sectors on penalties for administrative offences
If there are other current laws which regulate conduct which constitutes an administrative offence in the securities and securities market sector, and which specifically regulates the form and level of penalties for such conduct, then such other laws shall apply.
Chapter II
ADMINISTRATIVE OFFENCES, FORMS OF PENALTY, AND LEVEL OF FINES
Section 1. BREACHES OF PROVISIONS ON MAKING PUBLIC OFFERS OF SECURITIES
Article 9. Fines for offences regarding public offers of securities
1. A fine of from ten million to twenty million VND shall apply to the issuing organization or to the director or general director, chief accountant or other affiliated person of the issuing organization, the underwriter or the consultant which prepared an application file for registration of a public offer of securities containing incorrect, misleading or incomplete information which affected the decision of investors.

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2. A fine of from twenty million to fifty million VND shall apply to the issuing organization or to the director or general director, deputy director or deputy general director, chief accountant or other affiliated person of the issuing organization, the underwriter or the consultant advising on the issue who commits one of the following breaches:
(a) Deliberate announcement of information which is incorrect or which hides the truth;
(b) Use of information outside the prospectus in order to conduct market research prior to receiving permission to undertake the public issue of securities;
(c) Distribution of securities incorrectly in terms of the contents of the registration for the offer regarding the class of securities, the period for conducting the issue and the minimum volume of securities to be offered;
(d) Making an announcement about the issue on the media which is incorrect in terms of the contents of the issue and the time for the issue;
(dd) The underwriter has a total value of securities which exceeds the percentage stipulated by law.
3. A fine of from one per cent (1%) to five per cent (5%) of the total amount of money unlawfully raised shall apply to the issuing organization or to the director or general director, chief accountant or other affiliated person of the issuing organization, the underwriter, the consultant advising on the issue, to the auditing organization which provided approval, the person signing the audit report or entity certifying the application file for registration of the public offer of securities containing false information which caused loss to investors.
4. A fine of from one to five times the amount of money unlawfully collected shall apply to an issuing organization making a public offer of securities without having a certificate of registration of such offer.
5. Forms of additional penalty shall be:
(a) Suspension of the issuing tranche for a period of forty-five (45) days in the case of a breach of clauses 2 and 3 of this article;

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(b) Revocation of the certificate of registration of the public offer after the period of suspension stipulated in sub-clause (a) above, if the breach was not remedied;
(c) Compulsory rescission of the issuing tranche in the case of a breach of clause 4 of this article;
(d) Suspension of the underwriting operation for forty-five (45) days in the case of a breach of clause 2(dd) of this article;
(dd) Confiscation of the entire proceeds illegally collected by the offending entity in the case of a breach of clauses 3 or 4 of this article.
6. Measures for remedying consequences shall be:
(a) If an investor requests rescission of its purchase order within a period of thirty (30) days from the date an issuing tranche is suspended pursuant to clause 5(a) of this article, then the issuing organization must recover the securities which it offered for sale and refund the deposit or purchase monies together with interest at the rate of on-call deposits.
(b) Within a period of thirty (30) days from the date the certificate of registration of the public offer is revoked pursuant to clause 5(b) of this article or from the date the issuing tranche is compulsorily rescinded pursuant to clause 5(c), the issuing organization must recover the securities which it offered for sale and refund investors their deposits or purchase monies together with interest at the rate of on-call deposits.
Section 2. BREACHES OF PROVISIONS ON PUBLIC COMPANIES
Article 10. Fines for offences regarding public offers of securities
1. A fine shall apply to any public company as defined in article 25.1(c) of the Law on Securities which commits a first offence, with mitigating circumstances as defined on article 6 of this Decree, being failure to lodge a file with the State Securities Commission within ninety days of the date of its becoming a public company.

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2. A fine of from five million to ten million VND shall apply to a public company which commits one of the following breaches:
(a) Failure to lodge a file with the State Securities Commission within ninety days of the date of its becoming a public company, applicable to the companies defined in article 25.1(c) of the Law on Securities;
(b) The file lodged by the public company with the State Securities Commission contains incorrect or incomplete information in terms of the requirements in article 26.1(c) of the Law on Securities;
(c) Failure to conduct securities registration or securities depository as required by articles 52 and 53 of the Law on Securities;
(d) Failure to comply with the provisions of the Law on Enterprises regarding corporate management as required by article 28.1 of the Law on Securities.
3. A fine of from ten million to twenty million VND shall apply to a public company which commits one of the following breaches:
(a) Failure to lodge a registration file with the State Securities Commission after the expiry of one year from the date of becoming a public company, applicable to the companies defined in article 25.1(c) of the Law on Securities;
(b) Failure to disclose information as required by article 101 of the Law on Securities;
(c) Breach of the accounting regime applicable to public companies or failure to audit annual financial statements or failure to apply the corporate management regime as required by the Law on Enterprises after the expiry of one year from the date of becoming a public company;
(d) Failure to correctly conduct securities registration or securities depository leading to a dispute or legal proceedings regarding ownership and affecting the interests of shareholders in the public company.

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4. Measures for remedying consequences shall be:
Compulsory compliance with law, applicable to the breaches stipulated in clauses 1, 2 and 3 of this article.
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