Headlines 21/01/2021 16:40 CH

Principles of formulation of securities companies’ charter are now in effect

Ngọc Duy

This is the highlight of the 2020’s Circular No. 121/TT-BTC regarding operations of securities companies.

According to this document, when formulating the company’s charter, in addition to compliance with regulations laid down in the Circular No. 121/TT-BTC the following principles must be observed:

(1) It is not in breach of regulations of the Law on Securities and the Law on Enterprises.

(2) If a securities company is a public one, they must consult regulations of the Law on Securities, the Law on Enterprises and the Circular No. 121/TT-BTC to formulate the company’s charter;

When formulating the charter, securities companies must refer to the sample charter applicable to public companies under corporate governance regulations applied to public companies;  

(3) If a securities company is a joint stock business not yet going public, or a limited liability company, when formulating the charter, they must ensure their charter is conformable to the Law on Securities and the Law on Enterprises;

(4) When formulating the company’s charter, securities companies must consult regulations (2) and (3);

In addition, they must integrate the details of regulations set out in clause 4 of Article 5 in the Circular No. 121/TT-BTC into the company’s charter;

(5) Securities companies must publish the full text of the company's charters on official websites of securities companies.

Circular No. 121/TT-BTC is entering into force as of February 15, 2021.

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