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THE STATE SECURITIES
COMMISSION
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SOCIALIST REPUBLIC OF
VIET NAM
Independence - Freedom – Happiness
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No: 05/1999/QD-UBCK3
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Hanoi, March 27, 1999
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DECISION
PROMULGATING THE REGULATION ON SECURITIES CUSTODY, CLEARING
AND REGISTRATION
THE CHAIRMAN OF THE STATE SECURITIES COMMISSION
Pursuant to Decree No.15/CP of March 2, 1993
of the Government on the tasks, powers and State management responsibilities of
the ministries and ministerial-level agencies;
Pursuant to Decree No.75/CP of November 28, 1996 of the Government on the
establishment of the State Securities Commission;
Pursuant to Decree No.48/1998/ND-CP of July 11, 1998 of the Government on
securities and securities market;
Pursuant to Decision No 127/1998/QD-TTg of July 11, 1998 of the Prime Minister
on the establishment of the Securities Trading Centers;
At the proposal of the Director of the Securities Trading Management Department,
DECIDES:
Article 1.- To
promulgate together with this Decision the Regulation on securities custody,
clearing and registration.
Article 2.- This
Decision takes effect 15 days after its signing.
Article 3.- The head of
the Office, the director of the Securities Trading Management Department, the
heads of the units attached to the State Securities Commission, the Securities
Trading Centers, the custody members and the concerned parties shall have to
implement this Decision.
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THE STATE SECURITIES
COMMISSION
Le Van Chau
REGULATION
ON SECURITIES CUSTODY, CLEARING AND REGISTRATION
(Issued
together with Decision No.05/QD-UBCK3 of March 27, 1999 of the Chairman of the
State Securities Commission)
Chapter I
GENERAL PROVISIONS
Article 1.- This
Regulation stipulates the principles, content, order and procedures related to
securities custody, clearing and registration activities.
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1. Securities registration is the
acknowledgement of the ownership, other rights and relevant obligations of the
securities holders by a securities custody information system in the securities
custody accounts.
2. Securities trading comparison is the
reception of information related to transactions already executed at the
Securities Trading Center and the reconfirmation of such information’s accuracy
with the Securities Trading Center by purchasing and selling members.
3. Securities and cash clearing is the clearing
among securities purchasing and selling transactions executed at the Securities
Trading Center for each type of securities with the same settlement day in
order to determine the volume or value of securities and cash which each
custody member must deliver or receive on the settlement day.
4. Securities custody is the storing and
preservation of securities of clients, thus helping them to exercise their
rights over their securities.
Clients shall be classified into two kinds:
a/ Clients of the Securities Trading Center;
b/ Clients of the custody members.
5. Custody member is a member securities firm or
a commercial bank licensed for custody operation by the State Securities
Commission in order to provide securities custody, clearing and registration
services at the Securities Trading Center.
Custody members shall be classified into two
kinds:
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b/ Foreign custody member is a foreign bank
branch or a joint venture bank operating in Vietnam which is licensed for
custody operation by the State Securities Commission to provide the securities
custody, clearing and registration services at the Securities Trading Center to
foreign organizations and individuals.
6. Professional staff is the staff of custody
members granted the custody practitioner licenses by the State Securities
Commission to engage in the securities custody, clearing and registration
activities.
7. Working day is every week day from Monday
through to Saturday, except for the public holidays defined in the Labor Code
and days off under decisions of the Director of the Securities Trading Center
in cases where the computer system is struck with incidents or force majeure
cases.
8. Settlement day is a day when the securities
buying custody member or selling custody member receives their securities or
cash according to the State Securities Commission’s regulations.
9. Trading report is a detailed report on
transactions of custody members made by the Securities Trading Center.
10. Securities custody account is an account
used for accounting the deposit, withdrawal or transfer of securities, as well
as for accounting of the securities delivery and reception.
11. Pledgor is a custody member that, on its own
behalf or under the authorization of the borrower, delivers securities to the
pledgee.
12. Pledgee is a custody member that, on its own
behalf or under the authorization of the lender, receives the pledged
securities from the pledgor.
13. Final registration day is the day fixed by
the issuing organization to determine the list of securities owners in service
of the exercise of the securities owners rights.
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1. Securities custody,
clearing and registration by the Securities Trading Center shall be affected at
the head office of the Securities Trading Center.
2. Only the Securities Trading Center and
organizations, licensed to conduct the custody operation may provide custody
services.
Chapter II
CUSTODY MEMBERS
Article 4.- All
securities firms which have been granted securities business operation licenses
by the State Securities Commission to conduct one or several securities
business types specified in Points a, b, c and d, Clause 2, Article 29 of the
Government’s Decree No.48/1998/ND-CP of July 11, 1998 on securities and
securities market shall naturally be granted securities custody licenses by the
State Securities Commission.
Within 15 days after a securities firm files an
application, produces the list of its professional staff members who have been
granted the custody practitioner licenses, and pays the licensing fee as
prescribed, the State Securities Commission shall grant the custody operation
license to such securities firm.
Article 5.- A commercial
bank applying for the custody operation license must meet the following
conditions:
1. Having been granted license for establishment
and operation in Vietnam by the State Bank;
2. Having enough material and technical
facilities to ensure the provision of custody services;
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Article 6.- The dossier
of application for custody operation license for a domestic commercial bank or
a joint venture bank shall include:
1. An application for custody operation license;
2. The notarized copy of the bank’s charter;
3. The written explanation on its
material-technical facilities in service of the securities custody operation;
4. The list of its professional staff members
enclosed with their practitioner licenses granted by the State Securities Commission;
5. The audited financial reports for the latest
two consecutive years;
6. The notarized copies of the establishment and
operation license of the applying organization;
7. The curricula vitae of the managing board’s
members, as well as the custody member’s representatives;
8. The specimen seal of the applying
organization, the specimen signatures of the manager, the management board’s
members in charge of custody operation and the authorized representative(s) of
such organization;
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Article 7.- A foreign
bank’s branch wishing to apply for the custody operation license shall, besides
documents specified in Article 6 of this Regulation, have to submit also the
following documents:
1. The notarized copy of the current charter of
the original bank;
2. The notarized copies of the operation license
of the original bank and the establishment and operation license of the foreign
bank’s branch;
3. The notarized copy of the original bank’s
authorization letter permitting its branch to conduct the custody operation;
4. The financial reports for the latest two
consecutive years and the report on custody operation of the original bank;
5. Other documents at the request of the State
Securities Commission.
Article 8.-
1. Within 90 days after
receiving the banks’ complete dossiers of application for custody licenses, the
State Securities Commission shall grant or refuse to grant custody operation
licenses. Enclosed with the refusal must be the written explanation of the
reasons therefor.
2. The banks applying for custody operation
licenses shall have to pay the licensing fee as prescribed before officially
receiving the licenses.
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Article 9.- At the
requests of the concerned securities firms and commercial banks, the State
Securities Commission shall consider and grant the securities custody
practitioner licenses to individuals who fully meet the following conditions:
1. Having full legal capacity and full capacity
for civil acts;
2. Not falling in one of the following cases:
a/ Being examined for penal liability;
b/ Having been sentenced for serious crimes
against the national security, the socialist property, the citizens’ property;
or serious economic crimes;
c/ Having been sentenced for other crimes, but
their sentences not being wiped out yet.
3. Having the financial or banking degrees of
intermediate or higher levels;
4. Having all professional certificates on
securities, issued by the State Securities Commission.
Article 10.- A
practitioner license application dossier of a Vietnamese citizen shall include:
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2. His/her securities professional certificates
issued by the State Securities Commission;
3. His/her curriculum vitae with the competent
agency’s certification that the applicant does not fall within the cases
specified in Clause 2, Article 9 of this Regulation;
4. The comments of the agency(ies) where the
practitioner license applicant previously worked (if any);
5. The notarized copies of his/her financial or
banking intermediate or higher degrees.
Article 11.- A
practitioner license application dossier of a foreigner working in Vietnam
shall include:
1. An application for practitioner license;
2. The photocopy of his/her passport and the
notarized copy of his/her permit for residence in Vietnam;
3. The work permit for foreign laborers granted
by the Ministry of Labor, War Invalids and Social Affairs;
4. The diplomas and certificates evidencing
his/her educational level and professional qualifications;
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6. The custody practitioner license granted by
the foreign country or the securities professional certificates issued by the
State Securities Commission;
7. The comments of the agency(ies) where the
practitioner license applicant previously worked (if any).
Article 12.- The
practitioner license applicant shall have to pay a licensing fee of VND 1
million to the State Securities Commission before receiving the practitioner
license.
Article 13.-
1. A custody member shall
have to register at least two professional staff members to perform the
securities custody, clearing and registration at the Securities Trading Center,
together with the authorization paper for such professional staff members.
2. The Securities Trading Center may request a
custody member to change, increase or reduce the number of its professional
staff members mentioned in Clause 1 of this Article to support the settlement
of securities transactions in case of necessity.
Article 14.- A custody
member shall have the following rights and obligations:
1. To authorize in writing the designated bank
to effect the payment of money for securities transactions, and commit itself
to notify the Securities Trading Center of any change related to the
authorization paper;
2. To authorize in writing the Securities Trading
Center to perform operations related to the settlement of securities
transactions as prescribed;
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4. To commit itself to abide by all regulations
of the State Securities Commission, the Securities Trading Center and the
designated banks on matters related to the securities custody, clearing and
registration;
5. To provide the Securities Trading Center with
information or documents necessary for conducting the securities custody,
clearing and registration.
Article 15.-
1. The custody members
shall cease the securities custody, clearing and registration at the Securities
Trading Center in the following cases:
a/ Such custody members wish to do so
voluntarily;
b/ It is done so on the Securities Trading
Center’s order.
2. The custody members that cease the service
provision according to Point a, Clause 1 of this Article shall have to submit
the applications for withdrawal of custody operation license to the State
Securities Commission and may terminate their operations only after obtaining
the State Securities Commission’s approval.
3. A custody member shall be compelled to stop
the provision of services according to Point b, Clause 1 of this Article, in
the following cases:
a/ Such custody member has failed to pay to the
Securities Trading Center the fee or any expense for two consecutive times;
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4. The custody members that cease the securities
custody, clearing and registration shall have to:
a/ Pay to the Securities Trading Center all
outstanding fee and expense amounts;
b/ Withdraw all remaining securities on their
securities deposit accounts within a time limit prescribed by the Securities
Trading Center. If they fail to do so, such custody members shall have to bear
all arising costs related to the securities safe-keeping and pay a fine as
prescribed.
After the custody members fulfill the above-said
obligation, the Securities Trading Center shall order the final settlement of
securities custody accounts of the custody members and the latter shall have to
terminate their operation from the date set by the Securities Trading Center.
Chapter III
SECURITIES CUSTODY
Article 16.-
1. In the securities
custody operation, the Securities Trading Center shall have the following
rights and obligations:
a/ To provide custody services for types of
securities traded at the Securities Trading Center;
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c/ To provide the custody members with
information on securities custody accounts;
d/ To guide the order and procedures for
depositing, withdrawing, transferring, delivering and receiving securities;
e/ To promptly inform the custody members on the
regulations, guidance and procedures newly promulgated or amended by the State
Securities Commission;
f/ To request the custody members to pledge to
comply with the provisions of this Regulation.
2. The Securities Trading Center shall have to
take full responsibility for the damage caused by itself to custody members.
Article 17.- The
securities allowed to be put in custody or sub-custody at the Securities
Trading Center include all types of shares, bonds, warrants of the right to
purchase shares, investment fund certificates, and other types of securities
listed at the Securities Trading Center.
Article 18.-
1. The custody members
shall have to open and manage accounts for their clients who have securities
kept in custody. Each account opened for a client of a custody member must
include following contents:
a/ The number of the securities custody account;
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c/ The serial number of the identity card or the
passport, or the serial number of the enterprise’s establishment license;
d/ The volume of securities;
e/ The type and code number of securities;
f/ Other necessary information.
2. In cases where there is any change or error
regarding the information in the securities custody account, the client shall
have to immediately notify it to the concerned organization so that the latter
may acknowledge the change or correct the error in time and accurately.
3. If Vietnamese organizations and/or
individuals that are not custody members wish to have their securities kept in
custody, they shall have to deposit their securities and file applications for
opening of securities custody accounts at domestic custody members.
If foreign organizations and/or individuals that
are not custody members wish to have their securities kept in custody, they
shall have to deposit their securities and file applications for opening of
securities custody accounts at foreign custody members.
Article 19.-
1. Custody members shall
have to open securities custody accounts for their clients separately from
their own securities custody accounts in order to account the deposit,
withdrawal or transfer of securities.
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Article 20.-
1. Custody members that
keep their clients’ securities in custody shall register their names as
trustees authorized by the clients to perform the securities custody, clearing
and registration operations.
2. Custody members shall, within 120 days after
being granted the custody operation licenses by the State Securities
Commission, register and fill in the procedures for opening securities custody
accounts at the Securities Trading Center.
3. Securities listed at the Securities Trading
Center must be kept in the centralized custody there.
4. The Securities Trading Center shall undertake
custody of securities from its custody members with its name registered in the
capacity as a trustee authorized by the custody members to perform securities
custody, clearing and registration operations.
5. The custody members shall deposit their
clients’ securities in sub-custody at the Securities Trading Center on the basis
of account opening contracts between the clients and the custody members.
6. Securities shall be kept in the concentrated
custody at the Securities Trading Center in the form of general custody, and
since then the securities owners shall become co-owners of securities in
general custody.
Article 21.- A
securities custody account opened by a custody member at the Securities Trading
Center must include the following contents:
a/ The serial number of the securities custody
account;
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c/The volume, type and code number of securities
in custody and the name of the issuing organization;
d/ The increase or decrease in volume of
securities in custody and the reason(s) therefor;
e/ If the securities custody account is a pledge
one: the names and addresses of the pledgor and pledgee in cases where the
custody member pledges securities in custody;
f/ The business registration number and the
registered number of the custody member granted by the Securities Trading
Center;
g/ Other information as prescribed by the
Securities Trading Center.
Article 22.-
1. Securities custody
accounts opened by the custody members at the Securities Trading Center shall
be categorized as follows:
a/ Domestic securities custody accounts;
b/ Foreign securities custody accounts.
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Only foreign custody members shall be entitled
to open the foreign securities custody accounts at the Securities Trading
Center
Article 23.- Securities
custody accounts specified in Clause 1, Article 22 of this Regulation shall be
categorized as follows:
1. Securities custody accounts for accounting of
the deposit, withdrawal and transfer of securities include three following
types:
a/ Securities deposit accounts;
b/ Trading halt accounts;
c/ Pledge accounts.
2. Accounts for clearing of securities already
traded.
Article 24.- The effect
of the securities custody at the Securities Trading Center is stipulated as
follows:
1. In cases where a member underwrites the
securities issuance or subscribes to securities registered at the Securities
Trading Center, the custody of the concerned securities shall take effect after
the Securities Trading Center receives the report on distribution of newly
issued securities to the securities purchasers.
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a/ The issuing organization additionally issues
shares to increase its capital: the securities custody shall take effect one
working day after the Securities Trading Center receives the money for
securities subscription;
b/ The issuing organization pays dividends in form
of securities: the securities custody shall take effect after the Securities
Trading Center receives the report on distribution of securities to
shareholders from the issuing organization;
c/ The convertible bonds are converted or the
right to purchase shares is exercised: the securities custody shall take effect
after the Securities Trading Center receives valid applications for conversion
of convertible bonds or for purchase of shares;
d/ The issuing organization issues convertible
bonds and warrants of the right to purchase shares: the securities custody
shall take effect after the Securities Trading Center receives the money paid
for subscription.
3. In cases where securities custody at the
Securities Trading Center is effected in contravention of the provisions in
Clauses 1 and 2 of this Article, the securities custody shall take effect after
the Securities Trading Center credits the securities to the securities
depositing accounts opened by the custody members at the Securities Trading
Center.
Article 25.-
1. When depositing
securities in the concentrated custody at the Securities Trading Center, the
custody members shall have to submit to the Securities Trading Center the
following documents:
a/ The securities deposit bills;
b/ In cases where securities under the ownership
of the custody members’ clients are deposited such custody members shall also
have to submit the securities deposit bills made by such clients;
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d/ Documents evidencing the ownership over the
securities in custody;
e/ Other documents as prescribed by the
Securities Trading Center.
2. Securities deposited at the Securities
Trading Center must be securities of the issuing organizations which have
already been registered at the Securities Trading Center.
3. The securities deposited in custody must be
valid and damage-free and must not be those banned from exchange, announced
stolen or litigated. The signatures on the securities certificates must be
genuinely valid and must not be counterfeit ones.
4. If the documents specified in Clause 1 of
this Article and submitted by the custody members conform to the regulations,
the Securities Trading Center shall account the volume of securities deposited
in the securities custody accounts and issue securities deposit certificates to
the concerned custody members.
5. After accounting the volume of securities
deposited in the securities custody accounts, if the Securities Trading Center
detects that such securities are no longer valid for circulation, not up to the
standards or invalid, or the signatures thereon are counterfeit or invalid
ones, it shall cancel such securities custody. The custody members that have
deposited such securities shall have to take responsibility for all losses
incurred from the depositing of such securities.
Article 26.-
1. A custody member
wishing to withdraw securities shall have to file to the Securities Trading
Center a dossier containing:
a/ The securities withdrawal bill;
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c/ In case of application for withdrawal of
securities under the ownership of the custody member’s client, the custody
member shall also have to submit the securities withdrawal bill made by such
client;
d/ The documents related to the securities
withdrawal.
2. If the dossier is already accurate and
complete and the custody member has sufficient securities on the account, the
Securities Trading Center shall make the equivalent book entry of the
securities withdrawal on the securities custody account of the custody member
within the day when such custody member files the dossier, and give it a
written appointment for receiving the securities.
3. Within 7 working days from the date written
in the appointment paper, the custody member must come to receive the
securities certificates. Past such time limit, the Securities Trading Center
shall charge the securities custody fee.
Article 27.-
1. The Securities Trading
Center shall not undertake the securities custody, withdrawal, and/or transfer
on the following days:
a/ Working days specified by itself for merger,
division, change of securities certificates or execution of requests for
conversion of convertible bonds;
b/ Working days specified by the Securities
Trading Center for payment of bond principals and interests;
c/ Working days on which, due to technical
reasons, the Securities Trading Center is not able to execute the clients’
requests. In this case, the Securities Trading Center shall have to notify in
advance the concerned custody members of the reason(s) and time period during
which the Securities Trading Center shall not undertake the securities custody.
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3. Besides the provisions of Clause 1, this
Article, the Securities Trading Center shall not allow the securities
withdrawal or account transfer until it formally receives securities in custody
in cases specified in Article 24 of this Regulation.
Article 28.-
1. In order to effect the
through-account transfer of already traded securities according to clearing
result, the custody member shall have to fill in the procedures for opening an
account for clearing of traded securities separately from the account for
accounting the securities deposit, withdrawal and transfer.
2. The account stipulated in Clause 1, this
Article, shall be used for delivering and receiving securities according to
securities settlement vouchers made by the Securities Trading Center.
Article 29.-
1. The custody member
shall make, receive or cancel the transfer of securities on the securities
custody account in order to account the securities deposit, withdrawal and
transfer by way of sending requests through the computer system on each working
day.
2. When making securities through-account
transfer through the computer system, the custody member shall have to announce
the receipt of securities within the day of such account transfer. In cases
where the member fails to make announcement within such day, such account
transfer shall not be valid yet.
Article 30.-
1. The Securities Trading
Center shall effect the transfer of securities on the securities custody
accounts in conformity with the securities settlement vouchers.
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Article 31.- The
Securities Trading Center shall have to:
1. Provide the custody members with daily
information on account transfer or reception of account transfer of securities
on the securities custody accounts as well as the balance thereon through the
computer system of the Securities Trading Center on the working day after the
date of securities account transfer or securities account transfer reception.
2. Make reports on balance of securities custody
accounts of the custody members on the last day of each month and send them to
the custody members on the first day of the following month.
Article 32.- If the
information or reports specified in Article 31 of this Regulation are
inaccurate, the custody members shall request in writing the Securities Trading
Center to correct them before 14:30 hrs of the working day right after the date
they receive such information or reports.
In cases where the custody members do not
request for correction of information or reports within the prescribed time
limit, thus causing losses to the Securities Trading Center or the securities
owners, the custody members shall have to be liable for such losses.
Article 33.- The
securities pledge must be effected according to the following principles and
procedures:
1. The pledgor shall have to submit to the
Securities Trading Center a dossier including:
a/ An application for opening of a securities
pledge account;
b/ The written pledge pledge release request;
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d/ The securities pledge authorization paper (in
cases where the borrower is not a custody member);
e/ The request for transfer of pledged
securities into the pledge account;
f/ Other documents stipulated by the Securities
Trading Center.
2. In cases where the lender is not a custody
member, the lender shall have to authorize the reception of securities pledge
to a certain custody member.
3. If the dossier submitted by the pledgor is
complete and accurate, the Securities Trading Center shall open a pledge
account and transfer securities into it at the pledgor’s request.
4. The pledge account must be separated from the
other securities custody accounts of the pledgor. The Securities Trading Center
shall suspend the withdrawal, transfer or assignment of securities on the
pledge account within the pledge term. After recording pledged securities in
the registration book, the Securities Trading Center shall have to notify in
writing the pledgee of the effect of the securities pledge.
Article 34.-
1. The securities pledge release
shall be effected according to the following principles and procedures:
a/ The person who is in charge of the securities
pledge release must be the securities pledgee;
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c/ The pledgee shall have to send the securities
pledge pledge release request to the Securities Trading Center.
2. If the dossier submitted by the pledgee is
accurate and complete, the Securities Trading Center shall cancel the
securities pledge in the securities owners registration book.
3. After cancelling the securities pledge, the
Securities Trading Center shall have to send to the pledgee a written notice of
the cancellation of the securities pledge.
4. Through the computer system, the pledgee
shall have to request the transfer of securities already released from the
pledge account to other accounts.
Article 35.- If the
pledgor fails to perform or perform the due obligation(s) not according to the
agreement, the pledged assets shall be handled by mode already agreed upon by
the parties or put on auction for the performance of such obligation(s)
according to provisions of law.
The securities auction shall be conducted in
either of the two following ways:
1. In cases where the pledged securities with
original securities certificates are auctioned, the pledgee shall have to
withdraw the pledged securities certificates deposited at the Securities
Trading Center for auction.
2. In cases where the pledged securities without
original securities certificates are auctioned, the securities auction shall be
conducted as follows:
a/ The pledgee shall have to use the pledge
certification copies as proofs for auction instead of the pledged securities
certificates;
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- The decision on pledged securities auction;
- The announcement and the record of the
securities auction.
c/ At the request of the buyers in the auction
session, the securities delivery may be conducted in form of book-entry account
transfer or delivery of securities certificates.
Article 36.- The
custody members that use the securities custody, clearing and registration
services provided by the Securities Trading Center shall have to pay the
prescribed fees and charges.
Chapter IV
SECURITIES CLEARING
Article 37.-
1. The securities
clearing activities shall be conducted from 8:00 to 11:00 hrs and from 13:30
hrs to 15:00 hrs on all working days at the Securities Trading Center.
2. Securities clearing shall be applied to all
securities transactions at the Securities Trading Center.
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1. The securities transaction clearing shall be
effected by mode of multilateral clearing. The bilateral clearing mode shall be
applied to some cases and certain types of transaction under the Securities
Trading Center’s regulations;
2. The settlement of securities transactions
must comply with the principles of simultaneous securities delivery and money
payment.
Article 39.- The
comparison and clearing shall be conducted in the following order:
1. The members receive trading reports provided
by the Securities Trading Center;
2. The members send to the Securities Trading
Center their trading confirmation reports;
3. The Securities Trading Center shall have to
send notices to convoke the members in cases where the data in the trading
reports are not matched;
4. The Securities Trading Center shall effect
the money or securities clearing, and make settlement vouchers.
The specific time schedule and order for the
comparison and clearing shall be set by the Securities Trading Center.
Article 40.- The
transaction settlement shall be conducted in the following order:
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2. The custody members provide securities or
money to the Securities Trading Center;
3. The Securities Trading Center receive
securities or money from the providing custody members and deliver them to the
receiving custody members.
The specific time schedule and order for the transaction
settlement shall be set by the Securities Trading Center.
Article 41.- Settlement
of securities and money must satisfy the following requirements:
1. The settlement of traded securities must
accord with the volume of securities and money stated in the securities
settlement vouchers;
2. Money payment must be effected by mode of
transfer through the account system of the custody members and the Securities
Trading Market opened at a designated bank.
The designated bank is a big and prestigious
commercial bank and designated by the State Securities Commission on the basis
of consulting the State Bank and such commercial bank to open settlement
accounts for the Securities Trading Center and the custody members in service
of the settlement of securities transactions;
3. The custody members shall have to ensure the
sufficient transfer of money for transaction settlement into their clearing
accounts at the designated bank within the prescribed time limit by mode of
account transfer, a direct payment of cash or check at the designated bank;
4. By the prescribed time point, the designated
bank shall deduct money amounts for settlement from the clearing accounts of
the custody member and remit them into the clearing account of the Securities
Trading Center opened at such designated bank.
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SECURITIES REGISTRATION
Article 42.- All
securities must be concentratedly registered at the Securities Trading Center
through the custody members. The securities registration shall include:
1. Registering the newly issued securities;
2. Managing the securities owners registration
book;
3. Managing the assigned securities registration
book and the pledged securities registration book;
4. Drawing up the list of securities owners in
preparation for the shareholders’ annual congresses;
5. Providing services of sending letters to
invite shareholders and making minutes of the shareholders’ congresses;
6. Performing the activities related to the
payment of dividends;
7. Performing the securities registration
operations related to the increase of capital of the issuing companies;
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9. Other activities specified by the Securities
Trading Center.
Article 43.- The
Securities Trading Center has the obligations:
1. To record accurately and fully, and update
information on the registered securities;
2. To conduct the internal inspection in order
to protect clients or securities owners;
3. To preserve, store, gather and process data
related to the securities registration;
4. To supervise activities of the securities
owners in compliance with the provisions of law;
5. To provide guidance on the securities
registration procedures for the custody members.
Article 44.- Securities
shall be registered separately for each type according to the following
information:
1. The information on securities:
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b/ Securities type;
c/ Par value;
d/ Total volume of issued securities.
2. The information on securities owner:
a/ Name, nationality and address of the
securities owner;
b/ Serial number of the securities certificate
(if any);
c/ Volume of securities held by the securities
owner;
d/ Date of making the securities ownership
registration or date of transferring the securities ownership;
e/ Other information as prescribed.
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1. When it needs to
change the securities ownership, the full name and address of a securities
owner, a custody member shall have to submit the following documents:
a/ An application for changes in the information
on securities registration;
b/ A copy of the identity card or the passport
of the securities owner who wishes to change the information on securities
registration;
c/ A copy of the document evidencing the changes
in the ownership, the full name and address of the securities owner according
to the regulations;
2. When it needs to change the information on a
securities owner being a legal person, a custody member shall have to submit
the following documents:
a/ An application for changes in the information
on securities registration;
b/ A copy of the identity card or the passport
of the representative authorized by the legal person to sign the application
for changes in the information on securities registration;
c/ The document(s) evidencing the changes in the
information on the legal person issued by the competent agency;
3. The Securities Trading Center shall have to
adjust the registered information in compliance with Clauses 1 and 2 of this
Article. If it discovers any discrepancy in the information on securities
registration, the Securities Trading Center shall process such information
properly.
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EXERCISE OF THE
SECURITIES OWNERS’ RIGHTS
Article 46.-
1. Upon receiving the
issuing organization’s notice on the final registration day, the Securities
Trading Center shall have to notify the custody members thereof two weeks
before the final registration day.
2. Upon receiving the notice specified in Clause
1 of this Article, a custody member shall have to provide the Securities
Trading Center with the list of securities owners within 10 days after the
final registration day in cases where this list is used for the shareholders’
regular congress, and 3 working days after the final registration day in cases
where this list is used for other purposes by the issuing organization.
3. The custody member shall have to make the
list of domestic securities owners or the list of foreign securities owners.
These lists must include the following information which are valid until the
final registration day:
a/ The full names and addresses of the
securities owners;
b/ The occupations and nationalities of the
securities owners;
c/ The types and volume of securities;
d/ The registration numbers of the securities
owners being legal persons;
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Article 47.-
1. In cases where the
list of securities owners submitted by the custody member contains inadequate
or inaccurate information according to the provisions of Clause 3, Article 46
of this Regulation, the Securities Trading Center shall accept only the list’s
parts containing adequate and accurate information and return those with
inadequate and inaccurate information to the custody member for appropriate
correction.
2. In cases where any loss is caused due to the
custody member’s failure to submit adequate and accurate information within the
prescribed time limit, such custody member shall have to take responsibility
for such loss.
Article 48.- After
receiving the list of securities owners, the Securities Trading Center shall
notify the issuing organization of the information in the list within 20
working days after the final registration day if the list is used for the
shareholders’ annual congress, and 6 working days after the final registration
day if the list is used for other purposes by the issuing organization.
Article 49.-
1. The Securities Trading
Center shall have to compare the list of securities owners with the general
report on distribution of rights to clients sent by the issuing organization,
make the final rights distribution report and immediately send it to the
concerned custody member together with the issuing organization’s general
report.
2. After receiving the final rights distribution
reports from the Securities Trading Center, the custody members shall have to
promptly notify the concerned securities owners of the contents in such
reports.
Article 50.- Upon
receiving a written request of a custody member or a securities owner sent via a
custody member for the exercise of the rights over securities in custody at the
Securities Trading Center as stipulated in Articles 51, 52, 53, 54, 55, 56 and
57 of this Regulation, the Securities Trading Center shall, on behalf of the
securities owner or the custody member, exercise the rights in compliance with
the provisions of Clauses 1 and 4, Article 20 of this Regulation.
Article 51.- The
Securities Trading Center’s participation in the voting on behalf of the
securities owners at the latter’s requests is stipulated as follows:
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2. Upon receiving the request specified in
Clause 1 of this Article, a representative of the Securities Trading Center
shall participate in the shareholders’ congress (at the request and with
authorization letter), and exercise the voting right on behalf of the
securities owner.
Article 52.- The
Securities Trading Center’s participation in the voting on behalf of the
securities owners at the request of the issuing organization is stipulated as
follows:
1. In order to have enough number of lawful
shareholders to attend the shareholders’ congress, the issuing organization
shall have to send to the Securities Trading Center a written request for the
latter’s participation in the voting on behalf of the securities owners within
7 working days before the shareholders’ congress takes place;
2. The issuing organization shall have to
publicize the Securities Trading Center’s participation in the voting on behalf
of the securities owners within 10 working days before the shareholders’
congress takes place;
3. After the issuing organization makes such
public announcement, the securities owners shall have to send to the Securities
Trading Center notices through the custody members on their direct
participation in the voting or the waive of their voting right within 5 working
days before the shareholders’ congress takes place. If the securities owners fail
to send notices within the prescribed time limit, the Securities Trading Center
shall exercise its voting right at the request of the issuing organizations.
Article 53.-
1. In cases where it
exercises the right to purchase shares, a custody member shall have to send a
request for share subscription and pay share purchase money to the Securities
Trading Center within one working day before the deadlines for exercising the
share purchase right.
2. If the request specified in Clause 1 of this
Article is valid, the Securities Trading Center shall check and confirm with
the concerned custody member the holding of such custody member�s share purchase right. In
order to exercise the share purchase right, the Securities Trading Center shall
have to send to the issuing organization the warrant of the share purchase
right of the concerned custody member.
3. After receiving the report on exercise of the
share purchase right from the issuing organization, the Securities Trading
Center shall have to transfer such shares into the securities custody account
of the concerned custody member. Then, the Securities Trading Center shall
promptly notify such custody member of the exercise of the share purchase
right.
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Article 54.-
1. The custody member
wishing to exercise the right to convert the convertible bonds shall have to
send to the Securities Trading Center a written request for the conversion of
the convertible bonds together with other documents specified by the Securities
Trading Center within one working day before the deadlines for converting the
convertible bonds.
2. Upon receiving the request specified in
Clause 1 of this Article, the Securities Trading Center shall have to request
the issuing organization to promptly make the conversion. If it deems
necessary, the Securities Trading Center may prescribe a time limit for
converting the whole volume of such convertible bonds.
3. The Securities Trading Center shall provide
the custody member with the abstract of the securities custody account after
accounting the newly issued shares due to the conversion of convertible bonds
into the securities custody account of the custody member.
Article 55.-
1. In order to receive
dividends, bonus shares or bond principals and interests, the custody members
shall file to the Securities Trading Center applications for payment of
dividends, bonus shares or bond principals and interests. The Securities
Trading Center shall distribute dividends, bonus shares or bond principals and
interests to the concerned custody members on the working day after it receives
dividends, bonus shares or bond principals and interests from the issuing
organizations according to the securities holding proportions of the custody
members at such issuing organizations.
2. In cases where the Securities Trading Center
cannot distribute dividends, bonus shares or bond principal and interest within
the time limit prescribed in Clause 1 of this Article, it shall have to
promptly notify the concerned custody members of reason(s) for such delay.
Article 56.-
1. The Securities Trading
Center shall exercise the rights over securities of persons having their names
in the list of securities owners on the final registration day in cases where
such securities have already been withdrawn, as follows:
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b/ For dividends, bonus shares or bond
principals and interests, the Securities Trading Center shall receive and pay
or transfer at the custody members’ requests;
c/ The Securities Trading Center shall not
exercise the shareholders’ rights other than those specified in Points a and b,
Clause 1 of this Article.
2. In case of necessity, shares received from
the issuing organization according to Clause 1 of this Article shall be
accounted into a separate account.
3. The Securities Trading Center shall specify
the procedures for exercising the rights over securities as provided for in
Clause 1 of this Article.
Article 57.- The
Securities Trading Center shall prescribe the procedures for exercising the
rights other than those provided for in Articles 51, 52, 53, 54, 55 and 56 of
this Regulation.
Chapter VII
SETTLEMENT SUPPORT FUND
Article 58.- The
settlement support fund is a fund formed with contributions by the custody
members and used to effect the settlement on behalf of a custody member in
cases where such member is temporarily incapable of settling its transactions.
Article 59.-
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2. The contribution levels are stipulated as
follows:
a/ The fixed initial contribution level shall be
120 million VND for a custody member being a securities firm, and 80 million
VND for a custody member being a commercial bank;
b/ The annual contribution level shall be equal
to 0.008% of the trading turnover for all custody members.
3. The settlement support fund shall be put into
the deposit account in the Securities Trading Center’s name at the designated
bank.
Article 60.-
1. The Securities Trading
Center shall be entitled to use the settlement support fund to make temporary
settlement on behalf of a custody member in cases where such member lacks
settlement capability.
2. The Securities Trading Center shall have to
open a separate account to manage the settlement support fund’s assets in
separation from the assets of the Securities Trading Center. All loss, profit
and incurred expenditure amounts related to the settlement support fund shall
be accounted on this account.
Article 61.-
1. In cases where a
custody member fails to make settlement within the prescribed time limit, the
Securities Trading Center shall have to transfer money to effect the settlement
of transactions in the following order:
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b/ In cases where the contributions mentioned in
Point a, Clause 1 of this Article are not enough for the settlement, the
Securities Trading Center shall set aside the contributions by other custody
members according to such custody members’ proportion of contributions to the
settlement support fund.
2. Within 5 working days after the settlement
support fund’s money is used, the violating custody members are obliged to refund
the settlement support fund the full amount they have used, compensate for all
losses caused by their settlement breaches together with the fine interest
calculated from the date the settlement support fund’s money is used. The
applicable fine interest shall be equal to 150% of the interest of the 1-year
deposits at the designated bank calculated on the number of late payment days
for the first 5 days, and 6% per day from the 6th day. The fine interest shall
be transferred into the settlement support fund.
3. Besides setting aside part of the settlement
support fund to settle transactions according to Clause 1 of this Article, the
Securities Trading Center shall also temporarily collect all money amounts and
hold all securities that the violating custody members are entitled to receive
on the date the settlement support fund’s money is used and the subsequent
working days in order to fully retrieve the settlement support fund’s money
amount stipulated in Clause 2 of this Article.
4. If after 5 working days, the value of all
money amounts and securities collected according to Clause 3 of this Article is
not sufficient to offset the settlement amounts mentioned in Clause 2 of this
Article, the custody members that have breached the settlement shall have to mortgage
or pledge their assets or valuable papers equivalent to the outstanding amount
at the Securities Trading Center.
5. If the violating custody members fail to
comply with provisions of Clause 4 of this Article, the Securities Trading
Center shall temporarily suspend the securities clearing operation of such
members.
Article 62.-
1. In cases where a
concerned custody member fails to comply with provision of Clause 2, Article 61
of this Regulation, the Securities Trading Center shall have to apply the following
measures in the following order to retrieve the money amounts mentioned in
Clause 2, Article 61 of this Regulation:
a/ Using the money amount temporarily collected
according to Clause 3, Article 61 of this Regulation;
b/ Selling securities temporarily held according
to Clause 3, Article 61 of this Regulation;
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2. If the money amounts retrieved according to
Clause 1 of this Article are not enough for settlement of the amounts specified
in Clause 2, Article 61 of this Regulation, the members shall have to
immediately settle the outstanding amounts. If the violating custody members
fail to settle such outstanding amounts, the Securities Trading Center shall
temporarily suspend the securities clearing operation of such members.
Article 63.-
1. The contributions made
to the settlement support fund by the custody members shall be refunded only
when they are no longer custody members of the Securities Trading Center.
2. The refund of the settlement support fund
shall be made after all expenses related to services and fees for completing
the settlement of securities transactions and other obligations, which the custody
members have not fulfilled yet, are calculated.
3. As they are no longer custody members of the
Securities Trading Center, the contributions to the settlement support fund by
former custody members shall be refunded after the Securities Trading Center
deducts amounts that must be settled or amounts of the fund used by such
custody members.
Chapter VIII
REPORTING REGIME
Article 64.- The
Securities Trading Center shall have to make monthly, quarterly and yearly
reports as well as extraordinary reports at the State Securities Commission’s
request.
Article 65.-
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2. The custody members shall have to apply the
accounting regime set by the Ministry of Finance. The foreign custody members
that wish to apply other accounting regime shall have to obtain the approval of
the Ministry of Finance and the State Securities Commission.
Article 66.- Monthly,
quarterly, biannually and annually, the custody members shall have to make
truthful, accurate and complete reports on their operations to the State
Securities Commission, as prescribed. The annual custody operation reports must
be certified by an independent auditing organization accepted by the State
Securities Commission.
In case of any unusual activities, the custody
members shall have to report thereon to the State Securities Commission within
24 hours after its occurrence.
Chapter IX
INSPECTION, SUPERVISION
AND HANDLING OF VIOLATIONS
Article 67.- The
custody members and their professional staff members shall be subject to the
inspection and supervision by the Securities Trading Center and the State
Securities Commission in compliance with the provisions of the current law.
Article 68.- Any
custody members and professional staff members that commit acts of violating
the provisions in this Regulation shall be sanctioned according to the current
law provisions.
Chapter X
IMPLEMENTATION
PROVISIONS
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THE STATE SECURITIES
COMMISSION
Le Van Chau