CIRCULAR

ON SUPERVISION OF SECURITIES TRANSACTIONS ON THE SECURITIES MARKET

Pursuant to the Law on Securities of June 29, 2006;

Pursuant to the Law on amending and supplementing a number of articles of Securities Law, of November 24, 2010;

Pursuant to the Government’s Decree No. 58/2012/ND-CP, of July 20, 2012 detailing and guiding implementation of a number of articles of the Law on Securities and law on amending and supplementing a number of articles of the Law on Securities;

Pursuant to the Government’s Decree No. 118/2008/ND-CP, of November 27, 2008 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of president of State Securities Commission;

The Minister of Finance promulgates this Circular on supervision of securities transactions on the securities market.

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GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides on supervision of systematic securities transactions on the organized securities market.

Article 2. Subjects of application

This Circular applies to the supervising and supervised subjects as follows:

1. The supervising subjects:

a. State Securities Commission (below referred to as SSC);

b. The Stock Exchange (below referred to as SE).

2. The supervised subjects are organizations, individuals participating in course of transactions, supply of services relating to securities transactions, including:

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b. Securities companies (below referred to as SC); depository members of Securities Depository Center of Vietnam (below referred to as SDC);

c. Securities investment fund management companies, securities investment fund, securities investment companies;

d. SE, SDC when participate in supply of services relating to securities transactions;

e. Relevant objects (Supervising banks, Commercial banks which supply service of opening securities investment deposit accounts, investors).

Article 3. Interpretation of terms

In this Circular, the following terms are construed as follows:

1. The listed organizations, organizations conducting transaction registration mean public companies possessing securities listed, registered for transaction at SE.

2. Securities transactions mean purchase or sale of securities listed, registered for transaction on the organized securities market.

3. Internal transaction means securities transaction with use of inside information for purchase or sale of securities for selves or other person.

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5. Extraordinary transaction means transaction falling in the criterion of extraordinarily warning as prescribed by SE.

6. The criterion of extraordinarily warning means a system of supervision criteria in order to define that securities having extraordinary transaction which is formulated by SE and applied for implementation of transaction supervision after attaining approval of SSC.

7. Rumor means information of a group of persons or of a individual regarding a problem related to securities, or securities transaction happening on securities market which may be real or unreal, but at time of arising it, there is no grounds for verification.

Chapter II

ORGANIZATION OF SECURITIES TRANSACTION SUPERVISION

Item 1. THE STATE SECURITIES COMMITTEE'S SUPERVISION OF SECURITIES TRANSACTIONS

Article 4. Duties and powers of the SSC

1. Duties

a. The SSC supervises activities of securities transaction, of supply of services relating to securities transaction on organized securities market applicable to subjects specified in clause 2 Article 2 of this Circular;

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c. To detect activities of market manipulation, internal transaction and acts violating regulations of law on securities and securities market relating to transactions;

d. To supervise investors in compliance with regulations of law on securities transaction, provision of information related to securities transaction;

dd. Timely have suitable warnings for transactions and acts showing signs of violation aiming to prevent from acts of law violation in securities transactions of subjects supervised.

e. To summarize reports on securities transaction supervision of SE and on such basis, request SE for coordination in timely detecting, analyzing, evaluating and examining, handling as necessary with respect to subjects related to extraordinary securities transactions as prescribed by law;

g. To publish decisions on handling of violation with respect to organizations, individuals related to securities transaction on website of SSC;

h. For every 6 months or annually, or at the request of the Ministry of Finance, SSC shall report to the Ministry of Finance on result of implementation of securities transaction supervision.

2. Powers

a. To assume the prime responsibility for, and coordinate with relevant agencies, units in formulation of legal documents on securities transaction supervision and to submit them to competent authorities for approval;

b. To issue regulations on content, methods and process of securities transaction supervision of SSC; issue regulation of coordination in securities transaction supervision among the SSC, SE and SDC; to approve the system of transaction supervision criteria formulated by SEs;

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d. To assume the prime responsibility for, and coordinate with relevant units in inspection of organizations, individuals participating in activities of securities transaction and supplying services of securities transaction.

Article 5. Supervision contents of SSC

Supervision contents of SSC include:

1. On the basis of reports on transaction supervision of SE and other information source, to analyze deeply in order to detect transactions that manipulating market, transactions that using inside information and acts violating provisions of law on securities and securities market relating to activities of securities transaction in order to have measures to timely prevent and handle;

2. To supervise activities of SE in supervision of securities transactions happening on organized securities market within management of SE as prescribed in item 2 of this Circular;

3. To supervise activities of SDC in implementation of fixing and canceling errors post-transaction, transfer ownership of securities listed or registered for transaction without through the transaction system of SE as prescribed in Article 17 of this Circular;

4. To supervise activities of securities companies in transaction and provision of services related to securities transactions as prescribed by law;

5. To supervise securities transaction of organized investors, foreign investors in order to timely detect extraordinary happenings which may cause psychological effects for small and separate investors;

6. To supervise provision of services relating to securities transaction of subjects specified in clause 2 (from point b to point e) Article 2 of this Circular.

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1. Through transaction data provided by SE, to implement analyzing, evaluating, handling as prescribed with respect to securities transactions with extraordinary signs.

2. To supervise securities transactions basing on information from sources:

a. SE’s Reports on securities transaction supervision;

b. Reports of public companies, securities companies, SDC;

c. Reports of the listed organizations, organizations conducting transaction registration;

d. Reports, reflections of organizations, individuals participating in transactions on securities market;

dd. News sources on mass media, rumor;

e. Other information sources.

3. Extraordinarily inspect with respect to the supervised subjects through detecting signs of extraordinary transaction, according to reports of SE and organizations, individuals participating in transaction and providing services of securities transaction on securities market.

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Article 7. Duties and powers of the SEs

1. Duties

a. To supervise activities of transaction and provision of services related to securities transactions within scope of securities transaction market organized by them as prescribed by law;

b. To organize a supervision apparatus in conformity with their assigned functions and duties; to issue regulations, provisions, process of supervision in order to ensure effective supervision implementation;

c. To supervise happenings of transaction during day, many days, periodically; to analyze, evaluate and take responsibility for determining signs of violation with respect to extraordinary transactions aiming to timely detect transactions which have signs of market manipulation, internal transaction and acts violating regulations on securities transaction as prescribed in Article 8 of this Circular; to handle violations according to their competence, or report to SSC for handling according to regulations of law. 

d. To supervise information disclosure and regime of report according to current regulations relating to securities transaction of securities companies, listed organizations, organizations conducting transaction registration; securities investment fund management companies, public securities investment fund, securities investment companies, investors;

dd. To review press information, rumors relating to extraordinary transactions;

e. To make periodical, extraordinarily reports and reports at request on securities transaction supervision conducted by the supervised subjects and to send them to SSC;

g. To formulate system of database in service for supervision, including contents specified in Article 11 of this Circular.

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a. To issue system of securities transaction supervision criteria on the securities transaction floor as prescribed in Article 9 of this Circular after attaining consent of SSC;

b. To examine under authorization of SSC, according to their competence, to handle members conducting transactions which violate regulations on securities transaction, to propose with SSC for handling of acts of securities transaction which violate law regulations;

c. To request transaction members, relevant organizations, individuals for explanation, provision of information, documents related to securities transaction in service for supervision.

Article 8. The SEs’ content of securities transactions supervision

1. The SEs implement supervision aiming to prevent and detect transactions and acts which violating law on securities transaction, including:

a. Acts of using inside information for securities transaction;

b. Transactions manipulating market;

c. Other violations in securities transaction as prescribed by law on handling of administrative violation in securities and securities market and other relevant law provisions.

2. To supervise transaction and information disclosure relating to transactions of securities listed, registered transaction at securities transaction floors of organizations listed securities, organizations registered securities transaction, securities companies, securities investment fund management companies, public securities investment funds, securities investment companies, major shareholders, investors owning 5% or more than of fund certificates of a closed-form public fund, internal shareholders, internal investors of closed-form public funds and relevant persons, persons authorized for information disclosure and individual investor in accordance with current regulations.

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1. SEs formulate and issue system of securities transaction supervision criteria on the securities transaction floor to do as basis for supervision of transaction during day and many days after being accepted by the SSC;

2. Content and specific parameters in the system of securities transaction supervision criteria must be provided and adjusted in each period in conformity with transaction situation on securities market and ensure effective securities transaction supervision.

Article 10. Ses’ method to supervise securities transactions

1. Online supervision by the SEs' supervision system for transactions during day of securities listed, registered for transaction in order to detect extraordinary transactions.

2. To supervise securities transactions during many days basing on one or following sources:

a. Database of securities transactions;

b. Reports, reflecting information of securities companies, public companies, organizes, individuals participating in securities market; information published by investors according to provisions of law on securities and securities market;

c. News sources on mass media;

d. Other information sources.

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4. To implement inspection with respect to transaction members as prescribed in article 12 of this Circular. To coordinate with the SSC in periodical or irregular inspection with respect to the supervised subjects within management scope of SEs.

Article 11. The system of database in service for securities transaction supervision

1. SEs have responsibility for and take initiative in formulation of system of database in service for securities transaction supervision. A system of database must include contents minimally as follows:

a. Data on result of securities transactions;

b. List and information of the supervised subjects within scope of violation management as prescribed in law on securities and securities market and regulations of SEs.

c. Reports and information related to securities transaction published through the system of information disclosure of SEs; reports, information reported to the SSC;

d. Data relating to securities transaction accounts of investors.

2. System of database in service for securities transaction supervision must be formulated scientifically in order to able to use effectively when implement supervision, must be saved and kept according to current law regulations.

Article 12. Inspection of securities transaction activities

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a. Periodically inspection

- To inspect compliance of regulations, provisions, process relating to transactions, provisions in the member regulation issued by SEs;

- To inspect compliance of regulations on listing and information disclosure of organizations listed, organizations registered securities transaction when implementing securities transaction;

b. Irregular inspection: Inspection is implemented on the basis of signs of extraordinary transactions through supervision of transactions during day, many days under authorization of the SSC.

2. When detecting extraordinary transactions, SEs shall inspect under written authorization of the SSC as follows:

a. To request members conducting transaction and relevant subjects for provision of explanation on information related to that transaction;

b. To inspect at head office of member conducting transaction, of organizations related to securities transaction (as necessary);

c. SEs shall notify in writing to the inspected subjects under authorization at least 03 days before implementing inspection.

3. When inspecting at head office, branches or/and locations registered for securities transaction activities of transaction members as prescribed by law, based on authorization of the SSC, SEs must issue decision on inspection enclosed with inspection outline and must send written result of inspection to the inspected subjects within 05 working days after ending inspection.

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a. To handle according to regulations issued by SEs if detecting acts violating provisions relating to ck transactions of transaction members;

b. To report to the SSC on content of inspection, conclusion of inspection and plan to handle within 05 working days after issuing conclusion of inspection and handling;

c. To propose the SSC to handle violations with respect to transaction members in case falling beyond their competence.

Article 13. Periodical report of transaction supervision

1. SEs shall send periodical reports to the SSC including:

a. Weakly reports of transaction supervision include transaction order book, result of transaction order matching during day, periodical information during transaction day as prescribed in Article 32.2 of Circular No. 52/2012/TT-BTC, of April 05, 2012, of the Ministry of Finance, guiding information disclosure on securities market according to content specified in Form 01 and Form 02 Annex I enclosed with this Circular must be sent to the SSC within 02 first working days of next weak;

b. Monthly reports of transaction supervision according to content specified in Form 03, Annex I enclosed with this Circular must be sent to the SSC within 10 first working days of next month;

c. Annual reports of transaction supervision according to content specified in Form 04, Annex I enclosed with this Circular must be sent to the SSC within 20 first working days of next year.

2. Reports specified in clause 1 this Article shall be made under written and electronic data file forms. Especially report specified in point a clause 1 this Article is required to be sent only under electronic data file form. The above reports are sent under electronic data file form in case the SSC and SEs applied to program on electronic signature. SEs shall save ans kept information reported according to law regulations.

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1. SEs shall send irregular reports to the SSC:

a. When detecting events specified in clause 1 Article 8 of this Circular;

b. When receiving report requesting for irregular information disclosure relating to securities transactions of listed organizations, organizations registered securities transaction, securities companies, securities investment fund management companies, public investment funds, securities investment companies as prescribed in Article 33 of Circular No. 52/2012/TT-BTC, of April 05, 2012, of the Ministry of Finance guiding information disclosure on securities market.

2. Irregular reports shall be sent to the SSC on events mentioned in point b clause 1 this Article under written and electronic data file form within twenty four (24) hours after SEs detect facts or receive reports requesting for irregular information disclosure relating to securities transactions.

3. For irregular reports stated in point a, clause 1 this Article, SEs shall make reports which analyze separately each matter, with assessment opinions and proposals for handling method under their competence or proposals for handling in case falling beyond their competence.

Article 15. Report of transaction supervision at request

1. SEs shall send reports when receiving written request of the SSC;

2. Reports sent to the SSC stated in clause 1 this Article must be presented under written and electronic data file form according to content and time limit as requested by the SSC.

Chapter III

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Article 16. Obligation on provision of information and making explanation at the request of organizations and individuals participating in securities transactions and supplying services of securities transaction

1. Organizations, individuals participating in securities transactions and supplying services of securities transaction have obligation to timely, sufficiently, exactly provide information, documents, electronic data relating to content of securities transaction supervision at the request of the SSC, SEs; to make explanation at the request of the SSC, SEs on facts relating to securities transaction as prescribed by law and implement information disclosure as prescribed by law on securities and securities market in the following cases:

a. Securities transactions of organizations, individuals being major shareholders as prescribed in Article 29 of Law on securities and Circular No. 52/2012/TT-BTC, of April 05, 2012 of the Ministry of Finance, guiding on information disclosure on securities market;

b. Securities transactions of organizations, individuals or relevant persons with intention to hold twenty five percent (25%) of voting stocks, fund certificates of a public company, closed fund or holding twenty five percent (25%) or more than of voting stocks, fund certificates of a public company, closed fund as prescribed in Article 32 of Law on securities, Article 1 clause 11 of Law on amending and supplementing a number of articles of Law on securities, the Circular of the Ministry of Finance on guiding information disclosure on securities market and guiding public bid of stocks of public companies, fund certificates of closed-form public securities investment fund;

c. Securities transaction of members of the Board of Directors, the Control Board, General Directors (Directors), the Deputy General Directors (Deputy Directors), Financial Directors, Chief accountants, Heads of Financial and accounting divisions of the public company; persons authorized for information disclosure and relevant persons as prescribed in the Circular No. 52/2012//TT-BTC, of April 05, 2012, of the Ministry of Finance, guiding on information disclosure on securities market;

d. Commercial banks providing service of opening securities investment account for investor shall provide information on account balance of clients at the request of the SSC and competent agencies as prescribed by law;

e. Supervision banks shall provide data relating to activities of securities investment and transaction of investment fund which banks implement supervision at the request of the SSC and competent agencies as prescribed by law;

2. Investors being organizations, individuals upon participating in transactions on securities market shall coordinate with the SSC, SEs, competent agencies as prescribed by law as requested.

3. If organizations, individuals participating in securities transactions or provision of services of securities transaction fail to coordinate and cooperate with agencies specified in clause 2 this Article, they shall be handled as prescribed by law.

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1. The SDC has obligation to make and formulate a system of database according to current law regulations in order to service for securities market supervision.

2. To implement report regime in order to service for securities market supervision within scope of its function and send reports to the SSC including:

a. Monthly reports: Wihthin 10 first working days of month, the SDC shall send to the SSC reports:

- Report on issuance of securities coded (Table 1 Annex II);

- Report on situation of fixing, canceling errors in transaction payment (Table 2 Annex II);

- Statistics of securities transactions which transferring ownership without through transaction system (donation, inherit, etc) (Table 3 Annex II);

- Report on information and name of securities transaction account of investor opening at securities companies (Table 4 Annex II);

- List of major shareholders of companies registered securities at the SDC (table 5 Annex II).

Month reports according to content specified in monthly report form in Annex II enclosed with this Circular shall be made under written and electronic data file form and the reported information must be saved and kept as prescribed by law.

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c. Irregular reports: The SDC shall send to the SSC irregular reports when detecting signs of violation of regulations relating to activities of fixing, canceling errors post-transaction, transfer of ownership, rate owning securities with respect to investors, mortgage, change of securities ownership, implementation of rights; violations of securities depository member, organizations, individuals using services supplied by the SDC as prescribed by law.

3. The SDC shall save ans kept information reported according to law regulations.

4. In necessary case, the SDC shall implement periodical or irregular reports at the request of the Ministry of Finance.

Article 18. Obligations of securities companies

1. Securities companies have obligations:

a. To coordinate with the SSC, SEs in implementation fo securities transaction supervision as being requested;

b. To coordinate with the SSC in inviting investors in order to work with Inspection delegations of the SSC, SEs relating to transactions with extraordinary signs;

c. If detecting transactions vilolating regulations on securities and securities market, they shall report them to the SSC;

d. To make reports, documents and send them to the SSC, SEs as receiving written requests of the SSC, SEs.

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Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 19. Implementation provisions

1. This Circular takes effect on March 08, 2013 and replaces the Decision No. 127/2008/QD-BTC, of December 31, 2008 of the Minister of Finance on promulgating the Regulation on suppervision of securities transactions on the securities market;

2. The SSC and SEs shall organize apparatus to supervise securities transaction within their powers and duties as prescribed by law; to issue regulations, process in order to implement effective supervision; take initiative to coordinate, restraint overlapping among the supervising subjects.

3. The SSC, SEs, SDC, securities companies, public companies, listed organizations, organizations conducting transaction registration; securities investment fund management companies, securities investment companies, relevant organizations and individuals shall implement this Circular;

4. The Minister of Finance shall decide on amendments, supplementations, replacements to this Circular.

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