Thông tư 226/2010/TT-BTC chỉ tiêu an toàn tài chính biện pháp xử lý tổ chức kinh doanh chứng khoán

CIRCULAR

PRESCRIBING PRUDENTIAL RATIOS AND REMEDIES TO BE TAKEN BY SECURITIES-TRADING INSTITUTIONS THAT FAIL TO ACHIEVE THESE RATIOS

Pursuant to the June 29, 2007 Law on Securities;
Pursuant to the November 29, 2005 Law on Enterprises;
Pursuant to the June 14, 2005 Civil Code:
Pursuant to the Government's Decree. No. 118/2008/ND-CP of November 27. 2008, defining functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Government's Decree No. 163/2006/ND-CP of December 29, 2006, on establishment and execution of security transactions to secure the performance of civil obligations and handling of security assets;
The Ministry of Finance prescribes prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios, as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Scope and subjects of regulation

This Circular guides the determination of prudential ratios of securities companies and fund management companies operating in Vietnam (below collectively referred to as securities-trading institutions) and remedies to be taken by those institutions that fail to achieve these ratios.

Article 2. Interpretation of terms

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1. Market risk value means a value equivalent to a loss likely to be incurred when the market
price of assets owned by an institution adversely fluctuates.

2. Payment risk value means a value equivalent to a loss likely to be incurred when a partner is unable to make payment or transfer assets on time as committed.

3. Operational risk value means a value equivalent to a loss likely to be incurred due to a technical, systematic or professional procedure breakdown or a human error in the course of performance, or due to business capital shortages resulting from investment costs or losses or for other objective reasons.

4. Total risk value means the total of the market risk value, payment risk value and operational risk value.

5. Liquidity means equity which can be converted into cash within ninety (90) days.

6. Liquidity ratio means a percentage of the liquidity value to the total risk value.

7. Payment guarantee means an undertaking lo perform financial obligations in order to secure the payment by a third party.

8. Issuance underwriting duration means a period from the date the issuance underwriting obligation arises in the form of firm commitment to the date of payment to the issuing institution as committed.

9. Net position in a security at a time means a quantity of securities currently held by a securities-trading institution after the quantity of lent securities is reduced and the quantity of borrowed securities is increased under regulations.

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11. Group of institutions or individuals related to an institution or individual includes the following institutions or individuals:

a/ Parent company, affiliated companies, joint-venture companies or associated companies of such institution;

b/ Economic institutions., of which 30% or more of charter capital is held by such individual;

c/ Parents, adoptive parents, spouse, children, adopted children or blood siblings of such individual.

Article 3. Application principles

1. Securities-trading institutions shall calculate their prudential ratios and take responsibility for the accuracy of their calculations.

2. Asset ratios and capital sources used in the calculation of the liquidity value and risk values shall be updated as of (he lime of calculation.

3. Securities-trading institutions are not required to calculate the value of various risks against asset ratios which have been deducted from their liquidity under Article 5 of this Circular.

Chapter II

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Section I. LIQUIDITY

Article 4. Liquidity

1. Liquidity shall be determined according to Appendix 5 to this Circular, specifically as follows:

a/ Owner investment capital, excluding refunded preferred equity (if ay);

b/ Equity surplus:

c/ Reserve fund for charter capital supplementation;

d/ Development investment fund:

e/ Financial provision:

f/ Other funds pertaining to equity which are appropriated under law;

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h/ Fifty percent (50%) of the increased value of fixed assets which are revalued under law (in case the value of these assets is increased), or subtraction of the whole reduced value (in case the value of these assets is reduced);

i/ Foreign exchange rate difference;

j/ Benefits of minority shareholders:

k/ Deductions specified in Article 5 of this Circular;

1/ Increases specified in Article 6 of this Circular.

2. Treasury stocks (if any) shall be excluded from liquidity determined under Clause 1 of this Article.

Article 5. Deductions

1. The whole reduced value of investments, excluding securities specified in Clause 5 of this Article, resulting from the difference between the historical price and the market price, shall be determined according to Appendix 2 to this Circular.

2. Other deductions shall be determined according to Appendix 5 to this Circular, including:

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b/ The following ratios in short-term assets:

- Securities specified in Clause 5 of this Article in the short-term financial investment ratio:

- Prepayments;

- Receivables to be recovered or paid after over ninety (90) days;

- Advances to be refunded after over 90 days;

- Other short-term assets, except the cases specified in Clause 3 of this Article.

c/ Exceptions (if any) in audited financial statements which have not yet been deducted from liquidity under Points a and b of this Clause. In case an auditing institution certifies that exceptions no longer exist, the securities-trading institution is not required to deduct them.

3. Deductions from liquidity specified at Points a and b, Clause 2 of this Article do not include the following ratios:

a/Assets against which market risks shall be identified under Clause 2. Article 8 of this Circular, except securities specified in Clause 5 of this Article:

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c/ Provision for non-performing receivables;

d/ Customer deposits for securities trading;

e/ Customer deposits for securities trading payment and clearing.

4. Upon determining ratios of asset to be deducted from liquidity specified at Points a and b. Clause 2 of this Article, the securities-trading institution may reduce the value of deductions as follows:

a/ For assets used lo secure the obligation of the very securities-trading institution or of a third party, upon calculation of deductions, the smallest of the following values may be deducted: the market value of these assets determined according to Appendix 2 to this Circular (if any), the book value and (he residual value of the obligation:

b/ For assets secured with customer assets. upon calculation of deductions, the smallest of the following values may be deducted: the value of security assets determined according to Clause 6. Article 9 of this Circular and the book value.

5. The following securities in the ratio of financial investments, both short-term and long-term, shall be regarded as deductions from liquidity:

a/ Securities issued by institutions that have relationships with securities-trading institutions in the following cases:

- They are parent companies, affiliated companies, joint-venture companies or associated companies of securities-trading institutions:

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b/ Securities to be restricted from transfer for over ninety (90) days from the date of calculation.

Article 6. Increases

1. The whole increased value of investments, excluding securities specified in Clause 5. Article 5 of this Circular, resulting from the difference between the historical price and the market price, shall be determined according to Appendix 2 to this Circular.

2. Debts which can be converted into equity include:

a/ Convertible bonds and preferred stocks issued by a securities-trading institution which fully satisfy the following conditions:

- Having an initial term of at least five (5) years:

- Being not secured with assets of the very securities-trading institution:

- The securities-trading institution may prematurely redeem these bonds and stocks only at the request of owners or redeem them on the secondary market only after notifying such to the State Securities Commission under Clauses 5 and 6 of this Article;

- The securities-trading institution may stop paying interests and carry forward accumulated interests to the subsequent year in case the payment of interests causes business losses in the year:

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- The interest rate increase, including an increase in the interest rate added lo the reference interest rate, may only be made five (5) years after the dale of issuance for only once throughout the term before these preferred stocks are converted into common stocks:

- Having been registered as an addition to liquidity under Clause 4 of this Article.

b/ Other debit instruments which fully satisfy the following conditions:

- Being debts which may. in any circumstances, be paid to creditors after the securities-trading institution has paid debts to other secured and unsecured creditors;

- Having an initial term of at least over ten (10) years;

- Being not secured with assets of the very securities-trading institution:

- The securities-trading institution may stop paying interests and carry forward accumulated interests to the next year in case the payment of interests causes business losses in the year;

- The securities-trading institution may prematurely pay debts to its creditors only after notifying such to the Slate Securities Commission under Clauses 5 and 6 of this Article;

- The interest rate increase, including an increase in the interest rate added to the reference interest rate, may only be made five (5) years after the date of contract signing for only once throughout the term of loans;

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3. Limitations upon calculation of increases in liquidity:

a/ The value of amounts specified at Points a and b, Clause 2 of this Article shall be gradually depreciated on the following principles:

- Within last five (5) years before the deadline for payment and conversion into common stocks. 20% of the initial value of amounts specified at Points a and b. Clause 2 of this Article shall be depreciated each year;

- Within last four (4) quarters before the deadline for payment and conversion into common stocks. 25% of the remaining value after the depreciation under the above provision shall be further depreciated each quarter.

b/ Total value of amounts specified in Clause 2 of this Article shall be used to supplement liquidity to account for up to 50% of equity.

4. A securities-trading institution shall additionally register with the State Securities Commission debts specified in Clauses 2 and 3 of this Article as additions to its liquidity. A dossier for additional registration of liquidity comprises:

a/ A registration, made according to a form provided in Appendix 6 lo this Circular, for use of convertible bonds, preferred stocks and debts for addition lo liquidity;

b/ Minutes of meetings and resolutions of (he Board of Directors and the Members' Council, and the owner's decision on use of debts convertible into equity for addition to liquidity;

c/ Valid copies of loan contracts or equivalent documents. Loan contracts or equivalent documents must contain commitments of the two parties and all proper contents specified in Clauses 2 and 3 o\' this Article.

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a/ The liquidity ratio after the redemption of convertible bonds and preferred stocks or premature payment of debts registered as additions lo liquidity must not be lower than 180%;

b/ In case the securities-trading institution fails to satisfy the requirements at Point a of this Clause, it must have additional capital sources to assure that the minimum liquidity ratio is maintained at 180% or higher.

6. Securities-trading institutions shall report to the State Securities Commission at least fifteen (15) days before redeeming convertible bonds and preferred slocks or prematurely paying debts registered as additions to its liquidity. A reporting dossier comprises:

a/ Documents specified at Point a. Clause 4 of this Article;

b/ Documents specified at Points b and c. Clause 4 of this Article, for new convertible bonds, preferred stocks and debts to be used as additions to liquidity in replacement of convertible bonds and preferred stocks which must be redeemed or debts which must be paid (if any).

Section II. RISK VALUES

Article 7. Operational risk value

1. Operational risk of a securities-trading institution is equal to 25% of such institution's operation maintenance expenses in twelve (12) months prior to the latest month, or 20% of the law-prescribed legal capital, whichever is larger.

2. Operation maintenance expenses of a securities-trading institution are total expenses arising in a period minus the following:

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b/ Provision for short-term investment markdown;

c/ Provision for long-term investment markdown;

d/ Provision for non-performing receivables.

3. For a securities-trading institution that has only operated for less than one (1) year, its operational risk shall be determined to be three (3) times average monthly operation maintenance expenses counling from the time this institution commences its operation, or 20% of its legal capital, whichever is larger.

Article 8. Market risk value

1. At the end of a trading day. a securities-trading institution shall determine the market risk value with regard to its assets specified in Clause 2 of this Article.

2. Market risk shall be determined with regard to the following assets:

a/ Securities on the dealing account (for securities companies engaged in dealing operation) or the securities trading account (for fund management companies and securities companies not engaged in dealing operation), including securities in transfer from the seller;

b/ Securities received as supports from other individuals and organizations under law. including securities borrowed for the securities-trading institution itself and securities borrowed on behalf of other individuals and organizations;

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d/ Money amounts, money equivalents. negotiable instruments and valuable papers of all kinds owned by the securities-trading institution;

e/ Securities the issuance of which is underwritten by the securities-trading institution in the form of firm commitment, which remain undistributed and for which lull payment has not been received in the issuance underwriting duration.

3. Securities and assets specified in Clause 2 of this Article do not include:

a/ Treasury stocks;

b/ Securities specified in Clause 5. Article 5 of this Circular;

c/ Due bonds, debt instruments and valuable. papers on the monetary market.

4. The formula for determining the market risk value with regard to assets specified at Points a, b, c and d. Clause 2 of this Article is as follows:

Market risk value = Net position x Asset price x Market risk coefficient

b/ Market risk coefficient shall be determined according to Appendix 1 to this Circular;

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5. The market risk value of each asset determined under Clause 4 of this Article shall be increased in case the securities-trading institution invests too much in such asset, except securities subject to issuance underwriting in the form of firm commitment, government bonds and government-guaranteed bonds. This value shall be increased on the following principle:

a/ An increase of 10% in case the value of this investment accounts for between 10% and 15% of the securities-trading institution's equity:

b/ An increase of 20% in case the value of this investment accounts for between 15% and 25% of the securities-trading institution's equity;

c/ An increase of 30% in case the value of this investment accounts for 25% or higher of the securities-trading institution's equity.

6. The securities-trading institution shall increase stock dividends, bond yields, and the value of preferred rights whenever (hey arise (for securities), or loan interests (for deposits and money equivalents, negotiable instruments and valuable papers) in the asset price upon determining the market risk value.

7. The market risk value with regard to securities not yet fully distributed under contracts on issuance underwriting in the form of firm commitment shall be determined according to the following formula:

Market risk value

= { Undistributed securities or distributed securities for which payment has not been paid

x Issuance underwriting price - Value of security asset (if any)} x Issuance risk coefficient

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Market risk coefficient

+

(Issuance underwriting price - Trading price) (if positive)

Issuance underwriting price

a/ Trading price shall be determined according to Appendix 2 to this. Circular. For initial public offering, including initial auction of equities or bond auction, the trading price is equal to the book value per stock of the issuing institution determined at the latest point of time. or reserve price (if the book value is unidentifiable) or par value (for bonds);

b/ Market risk coefficient shall be determined according to Appendix 1 to this Circular;

c/ Issuance risk coefficient shall be determined based on the remaining period of lime up to the time of completion of the distribution under the contract, which must not be beyond the distribution deadline prescribed by law. as follows:

- Counting up to the distribution deadline, if the remaining period of time is over sixty (60) days, the issuance risk coefficient is 20%;

- Counting up lo the distribution deadline, if the remaining period of time is between thirty (30) and sixty (60) days, the issuance risk coefficient is 40%;

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- During the period from the distribution deadline to the due date of payment to the issuing institution, the issuance risk coefficient is 80%.

d/ After the deadline for payment to the issuing institution, the securities-trading institution shall determine the market risk value with regard to securities which cannot be fully distributed under Clause 4 of this Article.

e/ The value of security assets of customers shall be determined under Clause 6. Article 9 of this Circular.

Article 9. Payment risk value

1. At the end of a trading day, a securities- trading institution shall determine the payment risk value with regard to the following contracts and transactions:

a/ Time deposits at credit institutions and loans provided lo other institutions and individuals:

b/ Securities-borrowing contracts in compliance with law;

c/ Securities sale contracts which contain commitments to redeem securities in compliance with law;

d/ Securities purchase contracts which contain commitments lo resell securities in compliance with law:

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f/ Contract on issuance underwriting in the form of firm commitment signed with other organizations in an issuance underwriting syndicate in which the securities-trading institution is the principal underwriter;

g/ Overdue receivables, including also mature bonds, valuable papers, mature debit instruments for which payment has not been paid, receivables of the securities-trading institution and receivables of customers in activities of brokerage for securities sale;

h/ Assets beyond the lime limit for transfer, including securities in trading activities of the securities-trading institution and securities of customers in securities brokerage.

2. For contracts specified at Points a. b. c, d and e. Clause 1 of this Article, the payment risk value before the deadline for receipt of transferred securities and money and contract liquidation shall be determined as follows:

Payment risk value = Payment risk coefficient by partner x Value of assets with latent payment risk

a/ Payment risk coefficient by partner shall be determined based on credit ratings of trading partner(s) on the principle provided in Appendix 3 to this Circular;

b/ Value of assets with latent payment risk shall be determined on the principle provided in Appendix 4 to this Circular. The value of assets with latent payment risk shall be increased with stock dividends, bond yields and the value of preferred rights whenever they arise (for securities), or loan interests and other surcharges (for credits).

3. For contracts specified at Point f, Clause 1 of this Article, the payment risk value equals 30% of the remaining value of unpaid issuance underwriting contracts.

4. For overdue receivables and securities not yet received within the transfer lime limit specified at Points g and h, Clause 1 of this Article, including also securities and money amounts not yet received from due transactions and contracts specified at Points a, b, c, d and e. Clause 1 of this Article, the payment risk value shall be determined on the following principle:

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x Value of assets with latent payment risk

a/ Payment risk coefficient by time shall be • determined based on the overdue payment period on the principle provided in Appendix 3 to this Circular:

b/ The value of assets with latent payment risk shall be determined as follows:

- For transactions of securities purchase or sale, for customers or the securities-trading institution itself: This value is the market value of contracts calculated on the principle provided in Appendices 2 and 4 to this Circular;

- For securities margin purchase lending transactions, securities sale transactions with commitment to redeem securities, securities purchase transactions with commitment to resell, borrow or lend securities: This value shall be determined on the principle provided in Appendix 4 to this Circular;

- For receivables, mature bonds and due debit instruments: This value is the value of receivables calculated according to their par value, plus unpaid interests or yields and related expenses, and minus payments actually received (if any) beforehand.

5. A securities-trading institution may deduct the value of security assets of its partners and customers upon determining the value of assets with latent payment risk under Clause 1 of this Article if these contracts and transactions fully satisfy the following conditions:

a/ Partners and customers provide security assets to secure the performance of their obligations and these security assets are money, money equivalents, valuable papers and negotiable instruments on the monetary market or securities listed or registered for trading on the Stock Exchange, government bonds and bonds the issuance of which is underwritten by the Ministry of Finance;

b/ The securities-trading institution may dispose of. manage, use and transfer securities assets in case its partners fail to fulfill the payment obligation within the time limits agreed upon in contracts.

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Value of security assets = Volume of assets x Asset price x f 1 -Market risk coefficient)

a/ Asset price shall be determined on the principle provided in Appendix 2 to this Circular;

b/ Market risk coefficient shall be determined on the principle provided in Appendix 1 to this Circular.

7. Upon determining the payment risk value the securities-trading institution may make mutual net offsetting of the asset value with latent payment risk if fully satisfying the following conditions:

a/ The payment risk is related to the same partner;

b/ The payment risk occurs with regard to the same type of transaction specified in Clause 1 of this Article;

c/ Mutual offsetting has been agreed upon in writing by the parties.

8. The payment risk value shall be increased in the following cases:

a/ An increase of 10% in case the value of loans provided to an institution, individual and the group of related institutions or individuals (if any) accounts for between 10% and 15% of equity:

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c/ An increase of 30% in case the value of loans provided to an institution, individual and the group of related institutions or individuals (if any) or an individual and parties related to him/her (if any) accounts for 25% or more of equity.

9. In case a partner is totally insolvent, the whole loss calculated based on the contract value shall be deducted from liquidity.

Section III. LIQUIDITY RATIO AND REPORTING BY SECURITIES-TRADING INSTITUTIONS

Article 10. Liquidity ratio and warning levels

1. Liquidity ratio shall be determined on the following principle:

Liquidity ratio

=

Liquidity x 100%

Total risk value

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Article 11. Reporting on liquidity ratio

1. Regular reporting

Securities-trading institutions shall send to the State Securities Commission monthly liquidity ratio reports, made according to a form provided in Appendix 5 to this Circular. A report for a month shall be enclosed with an electronic file and sent within ten (10) days after the end of the month.

2. Irregular reporting

a/ As soon as its liquidity ratio falls below 180%, a securities-trading institution shall send to the State Securities Commission a liquidity ratio report, made according to a form provided in Appendix 5 to this Circular, twice a month (on the 15th and 30th). A report shall be enclosed with an electronic file and sent within 3 working days following the l5Ih and 30thevery month.

b/ As soon as its liquidity ratio falls below 150%. a securities-trading institution shall send to the Stale Securities Commission a weekly liquidity ratio report, made according to a form provided in Appendix 5 to this Circular. A report shall be enclosed with an electronic file and sent before 16:00 hours on every Friday.

c/ As soon as its liquidity ratio falls below 120%. a securities-trading institution shall send to the State Securities Commission daily liquidity ratio reports, made according to a form provided in Appendix 5 to this Circular. A report shall be enclosed with an electronic file and sent before 16:00 hours every day.

3. Securities-trading institutions may make reports on a regular basis under Clause I of this Article when their liquidity ratio reaches or surpasses 180% in the reporting periods for three (3) consecutive months.

Chapter III

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Section I. CONTROL

Article 12. Control

1. The State Securities Commission shall issue a decision to place a securities-trading institution under control when its liquidity ratio ranges between 120% and 150% in all reporting periods for three (3) consecutive months.

2. The control period is twelve (12) months. In case the State Securities Commission finds it necessary and at the request of a securities-trading institution, it may prolong the control period for not more than six (6) months.

3. A securities-trading institution will no longer be placed under control when its liquidity ratio reaches or surpasses 180% in the reporting periods for three (3) consecutive months.

Article 13. Remedy plan

1. Within fifteen (15) days after the State Securities Commission issues a decision to place a securities-trading institution under control, this securities-trading institution shall send to the State Securities Commission a detailed report on its financial status, causes and remedy plan.

2. A remedy plan shall be worked out for two (2) subsequent years, containing a roadmap. conditions, deadline and plan for implementation detailed by month and quarter. The State Securities Commission may request the securities-trading institution to adjust its remedy plan any time if it finds this plan unfeasible or unsuitable to market conditions or incompliant with law.

3. A remedy plan contains the following remedies:

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b/ Recovery of debts; resale of shares or capital contribution portions to creditors;

c/ Reduction of operation and corporate governance expenses; reorganization of the managerial apparatus and human resources or stuff cuts;

d/ Narrowing of the operation scope and area; closure of some subsidiaries or transaction bureaus; reduction of securities trading operations;

e/ Suspension of the payment of stock dividends and distribution of profits; increase of capital under law;

f/ Consolidation into or merger with a securities-trading institution conducting the same business line or of the same type under law;

g/ Other remedies not in contravention of law.

Section II. SPECIAL CONTROL

Article 14. Special control

1. The Slate Securities Commission shall issue a decision 10 place a securities-trading institution under special control when this institution falls into either of the following cases:

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b/ It fails to remedy the situation subject to control within the time limit specified in Clause 2. Article 12 of this Circular.

2. The period of special control is six (6) months after a securities-trading institution is placed under special control under Clause 1 of this Article.

3. A securities-trading institution will no longer be placed under special control when its liquidity ratio reaches or surpasses 150%' in all reporting periods for three (3) consecutive months.

4. Upon the expiration of the special control period specified in Clause 2 of this Article, if the securities-trading institution still fails to remedy the situation subject to special control and has an accumulated loss exceeding fifty per cent (50%) of its charier capital, it shall be suspended from operation. The order and procedures for operation suspension comply with the relevant guidance of the State Securities Commission and regulations of the Ministry of Finance.

Article 15. Plan to remedy the situation subject to special control

1. Within one (1) week after the State Securities Commission issues a decision to place a securities-trading institution under special control, this institution shall send to the Stale Securities Commission a detailed report on it’s financial status, causes and a remedy plan.

2. Remedy plans comply with Clauses 2 and 3, Article 13 of this Circular.

Section III. RESPONSIBILITIES OF RELATED PARTIES

Article 16. Responsibilities of individuals and securities-trading institutions placed under control or special control

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a/ Work out a plan to remedy the situation subject to control or special control and organize the implementation of this plan;

b/ Continue managing, controlling and administering operation and assure safely of assets of the securities-trading institution under law;

c/ Take responsibility for issues related to the organization and operation of the securities-trading institution before, during and after the period of control or special control;

d/ Provide supports or create conditions for other institutions to perform their responsibilities specified in this Circular and other jobs as requested in writing by the State .Securities Commission.

2. Before 16:00 hours every Friday, securities-trading institutions shall report to the State Securities Commission on the implementation of remedy plans and implementation results.

3. In the period of control or special control:

a/ A securities-trading institution may not pay stock dividends to its shareholders, divide profits to its capital contributors or give bonuses to members of the Board of Directors. Members' Council, Control Board. Director General (Director), Deputy Directors General (Deputy Directors), chief accountant, staff members and related persons:

b/ A securities-trading institution may not convert unsecured debts into debts secured with its assets:

c/ A securities-trading institution may neither purchase treasury stocks nor redeem capital contributions from capital contributors;

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e/A securities-trading institution may not set up new transaction offices, subsidiaries and representative offices, expand its operation area and add securities trading operations;

f/ A securities-trading institution may not contribute capital to establish affiliated, joint-venture or associated companies, and invest in real estate: is restricted from investing in high-risk assets or conducting business operations to increase its risk value and reduce liquidity.

Article 17. Responsibilities of other concerned institutions

1. The Stock Exchange, the Securities Depository Center, depository members, supervisory banks, payment banks and other concerned institutions shall provide the Slate Securities Commission with sufficient and timely relevant information and documents on transactions, investment and business operations of securities-trading institutions placed under control or special control, as requested in writing by the State Securities Commission.

2. The Stock Exchange, the Securities Depository Center, supervisory banks, depository banks and concerned securities-trading institutions shall provide guidance, supports and securities services to customers of securities-trading institutions placed under control or special control as requested in writing by the State Securities Commission.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 18. Organization of implementation

1. This Circular takes effect on April 1, 2011.

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3. The Stale Securities Commission shall, within the ambit of its functions and tasks, guide and inspect the implementation of this Circular by securities-trading institutions.

4. To annul provisions on determination of and reporting on liquidity in previous guiding documents which are contrary to this Circular.

5. Revision of this Circular shall be decided by the Minister of Finance.

FOR THE MINISTER OF FINANCE
DEPUTY MINISTER




Tran Xuan Ha

ANNEX 1:

MARKET RISK COEFFICIENT
(Together with the Minister of Finance's Circular No. 226/2010/TT-BTC of December 31, 2010, prescribing prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios)

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No.

Type of asset

Market risk coefficient

Money

1.

Cash

0%

2.

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0%

3.

Valuable papers, transferable instrument on currency market

0%

Debt securities

Government bond

4.

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0%

5.

Government bond with coupon interest rate

5.1

Government bond, Government bond of countries in bloc OECD or guaranteed by Government or Central Bank of the countries in this bloc. The bond issued by international organizations IBRD, ADB, IADB, AfDB, EIB and EBRD.

3%

5.2

The bond for projects that is guaranteed by the Government and Ministry of Finance with the remaining maturity time of less than 01 year.

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3%

The bond for projects that is guaranteed by the Government and Ministry of Finance has the remaining maturity time from 01 to 05 years.

4%

The bond for projects that is guaranteed by the Government and Ministry of Finance has the remaining maturity time from 5 years or more.

5%

Corporate bond

6.

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8%

The listed bond has the maturity time from 01 to 05 years, including convertible bond

15%

The listed bond has the maturity time from 05 years or more, including convertible bond

20%

7.

The unlisted bond has the remaining maturity time of less than 01 year, including convertible bond

25%

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30%

The unlisted bond has the remaining maturity time from 05 years or more, including convertible bond

40%

Stock

8.

Common stock and preferred stock of the listed organizations at HCM Stock Exchange; open fund certificate.

10%

9.

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15%

10.

Common stock and preferred stock of the public companies not listed and registered for trading via UpCom system.

20%

11.

Common stock and preferred stock of the public companies registering depository but not listed or registered for trading; Stocks are in the initial public offering issuance (IPO)

30%

12.

Stocks of other public companies

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Certificate fund of securities investment

13.

Public fund

10%

14.

Member fund

30%

Restricted Trading Securities

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15.

Securities are temporarily stopped, suspended from trading (not including the case where the stocks temporarily stopped from trading for transfer of trading floor.

40%

16.

Securities are cancelled  from listing and trading

50%

Other securities

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Share, capital contribution and other types of securities

80%

APPENDIX 2

PRINCIPLES FOR SECURITIES VALUATION
(To the Minister of Finance's Circular No. 226/2010/TT-BTC of December 31, 2010, prescribing prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios)

No.

Types of assets

Principles for determination of market trading prices

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1

Money (Vietnam dong - VND)

Account balance on the date of calculation

2

Foreign currencies

Value converted into VND at exchange rates applied by credit institutions licensed to deal in foreign exchange, counting on the date of calculation

3

Time deposits

Value of deposits plus unpaid interests by the date of calculation

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...

Treasury bills, bank bills, bills of exchange. transferable deposit certificates, bonds and discountable monetary market instruments

Purchase price plus accumulated interest by the date of calculation

Bonds

5

Listed bonds

- Average quoted price on the trading system of
the Stock Exchange on the latest trading day plus
accumulated interest;

- In case there is no transaction in more than two
(2) weeks prior to the date of calculation, the
price of these bonds is the highest among the
following values:

+ Purchase price plus accumulated interest;

+ Par value plus accumulated interest;

...

...

...

Or:

Max (Purchase price plus accumulated interest: par value plus accumulated interest; price determined by internal methods, including accumulated interest).

6

Unlisted bonds

Price of these bonds is the highest among the following values:

+ Quoted price (if any) on the quoting systems selected by securities-trading institutions, plus accumulated interest;

+ Purchase price plus accumulated interest:

+ Par value plus accumulated interest:

+ Price according to internal regulations of securities-trading institutions. including accumulated interest.

...

...

...

Max (Quoted price (if any): purchase price plus accumulated interest: par value plus accumulated interest: price determined by internal methods. including accumulated interest).

Stocks

7

Stocks listed on Ho Chi Minh City Stock Exchange

- Closing price on the trading day preceding the
dale of calculation;

- In case there is no transaction in more than two
(2) weeks prior to the date of calculation, the
price of these stocks is the highest among the
following values:

+ Book value;

...

...

...

+ Price determined by internal methods of securities-trading institutions.

Or:

Max (Book value; purchase price; price determined by internal methods)

8

Stocks listed on Hanoi Stock Exchange

- Average trading price of the trading day-
preceding the date of calculation;

- In case there is no transaction in more than two
(2) weeks prior to the date of calculation, the
price of these stocks is the highest among the
following values:

+ Book value;

+ Purchase price;

...

...

...

Or:

Max (Book value; purchase price; price determined by internal methods)

9

Stocks of public companies registered for trading on the UpCom system

- Average trading price of the trading day
preceding the date of calculation;

- In case there is no transaction in more than two
(2) weeks prior to the date of calculation, the
price of these stocks is the highest among the
following values:

+ Book value;

+ Purchase price:

+ Price determined by internal methods of

...

...

...

Or:

Max (Book value; purchase price: price

determined by internal methods)

10

Stocks already registered or deposited but not yet listed or registered for trading

- Average value based on quotation notices of at
least three securities companies other than related
persons on the trading day preceding the date of
calculation.

- In case there arc only quotation notices of less
than three securities companies, the price of these
stocks is the highest among the following values:

+ Quoted price in quotation notices;

+ Price in the latest reporting period;

...

...

...

+ Purchase price:

+ Price according to internal regulations of securities-trading institutions.

Or:

Max (Quoted price in quotation notices; price in the latest reporting period; book value; purchase price; price according to internal regulations of securities-trading institutions).

11

Stocks suspended from trading or delisted or deregistered for trading

The price of these stocks is the highest among the following values:

+ Book value;

+ Par value;

...

...

...

Or:

Max (Book value; par value; price determined by internal methods).

12

Stocks of institutions in state of dissolution or bankruptcy

80% of the liquidated value of these stocks on the dale of making the latest accounting balance sheet, or price according to internal regulations of securities-trading institutions.

13

Shares and other capital contributions

The price of these shares or capital contributions

is the highest among the following values:

...

...

...

+ Purchase price/value of capital contribution;

+ Price according to internal regulations of

securities-trading institutions.

Or:

Max (Book value; purchase price/value of capital

contribution: price according to internal

regulations of securities-trading institutions).

Funds/stocks of securities investment companies

14

...

...

...

- Closing price of the trading day preceding the date
of calculation;

- In case there is no transaction in more than two (2)
weeks prior to the dale of calculation, the price is
net asset value (NAV)/fund certificate in the last
reporting period prior to the dale of calculation.

15

Fund members/open-end funds/ stocks of securities investment companies in private placements

NAV per capital contribution unit/fund certificate unit/stock in the last reporting period prior to the date of calculation

16

Other cases

Under internal regulations of securities-trading institutions

Fixed assets

...

...

...

17

Land use rights...

Value determined by independent valuating institutions selected by securities-trading institutions

18

Houses/architectures including uncompleted capital construction items

Value determined by independent valuating institutions selected by securities-trading institutions/accumulated expenses for uncompleted capital construction

19

Equipment, machinery, vehicles....

...

...

...

20

Other fixed assets

Value determined by independent valuating institu­tions selected by securities-trading institutions

Notes:

- Accumulated interest means interest accounted from the latest lime of interest payment to the time of calculation.

- Book value of a stock is determined based on the latest audited or reviewed financial statement.

- Securities-trading institutions may select bond-quotation systems (Reuteurs /Bloomberg/ VNBF...) for reference.-

ANNEX 3:

...

...

...

(Together with the Minister of Finance's Circular No. 226/2010/TT-BTC of December 31, 2010, prescribing prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios)

3. 1. Payment risk coefficient by partner

No.

Partners make payment to securities trading organization

Payment risk coefficient

1.                   

0%

...

...

...

 Securities Exchange, Securities Depository Center

0.8%

3.                   

Credit organization, financial organization, securities trading organization are established in the countries of OECD bloc and have credit coefficient meeting other conditions as prescribed by the internal regulation of the securities trading organization.

3.2%

4.                   

Credit organization, financial organization, securities trading organization are established outside the countries of OECD or in countries of OECD and do not meet the other conditions as prescribed by the internal regulation of the securities trading organization.

4.8%

...

...

...

Credit organization, financial organization, securities trading organization are established and operate in Vietnam

6%

6.                   

Other organizations and individuals

8%

3.2. Payment risk coefficient by time

No.

The overdue period of securities payment and transfer

Risk coefficient

...

...

...

0-15 days after the period of securities payment and transfer

16%

2.

16 – 30 days after the period of securities payment and transfer

32%

3.

31 – 60 days after the period of securities payment and transfer

48%

4.

...

...

...

100%

Note:

- The period of securities payment / transfer receipt is T+3 (For listed stock), T+1 (For listed bond; or T+n (For agreement transactions outside the trading system in n as agreed by both parties)

- The payment risk value is adjusted to the increase as prescribed in Clause 8, Article 9 on the basis of information provided by customers in relation to regulation in Clause 11, Article 2.

ANNEX 4:

ASSET VALUE WITH LATENT RISKS

(Together with the Minister of Finance's Circular No. 226/2010/TT-BTC of December 31, 2010, prescribing prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios)

...

...

...

No.

Type of trading

Asset value with latene payment risks

1.

Deposit with term, loans unsecured by asset

The entire value of loan

2.

...

...

...

Max    ( Market value of the contract - value of secured asset (if any)), 0

3.

Securities loan

Max    (Value of secured Asset - market value of the contract), 0

4.

Contract of securities purchase with resale commitment

...

...

...

Max     Contract value calculated by purchase price - market value of the contract x ( 1-market risk coefficient), 0

5.

Contract of securities sale with redeem commitment

Max    ( Market value of the contract x (1 - market risk coefficient) - Contract value calculated by sale price ), 0

6.

...

...

...

Max     (Debit balance - value of secured asset), 0 

Note:

-  The debit balance includes the loan value, loan interest and costs;

- In case the customer’s secured asset has no reference price by the market, it will be determined by the internal regulations of the securities trading organization.

...

...

...

No.

Time

Asset value with latene risks

A – For the tradings of securities sale (the selling party is the securities trading organization or customer of the securities trading organization in the brokerage activities)

1.

Before the term of payment receiving

0

2.

After the term of payment receiving

...

...

...

0 (in case the market value is higher than the trading price)

B – For the tradings of securities buying (the buying party is the securities trading organization or customer of the securities trading organization)

1.

Before the term of securities transfer receiving

0

2.

After the term of securities transfer receiving

The market value of Contract (in case the market value is higher than the trading price) 

0 (in case the market value is higher than the trading price) 

...

...

...

The term of securities payment / transfer receiving is T+3 (For listed stock), T+1 (For listed bond; or T+n (For agreement transactions outside the trading system in n as agreed by both parties)

ANNEX 5:

REPORT ON PRUDENTIAL RATIOS

(Together with the Minister of Finance's Circular No. 226/2010/TT-BTC of December 31, 2010, prescribing prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios)

Company’s name:......

Official dispatch No.:...........

Regarding the report on prudential ratios

...

...

...

........, date......month......year...

To: State Securities Commission

REPORT ON PRUDENTIAL RATIOS

At the point of time:.........

We undertake that:

(1) The report is formulated on the basis of the data updated on the date of report making and it is made in accordance with regulations in the Circular No. 226/2010/TT-BTC dated December 31, 2010 of the Ministry of Finance stipulating the prudential ratios and the remedies to be taken by securities-trading institutions that fail to achieve these ratios;

 (2) For the issues likely to affect the company’s financial situation generated after the date of making this report, we will update them in the following report period;

(3) We will take full responsibilities before law for the accuracy and honesty of the report content.

...

...

...

Chief accountant

(Signature and full name)

Head of internal control division

(Signature and full name)

(General) Director

(Signature, full name and seal)

I. LIQUIDITY WORKSHEET

No.

...

...

...

Liquidity (L)

 L

Decrease

Increase

A

Capital resources

(1)

(2)

(3)

...

...

...

Equity excluding redeemable preference shares

(if any)

√

2

Equity surplus

√

...

...

...

3

Fund stock

(√)

4

Reserve fund for charter capital supplementation

√

...

...

...

5

Development Investment fund

√

6

Financial reserve fund

√

...

...

...

7

Other funds pertaining to equity

√

8

Accumulated Profits and after-tax profits which are undistributed before the deduction for setting up backup fund as prescribed by law

√

...

...

...

9

Differences upon asset revaluation (50% of increase or 100% of reduction)

√

10

Foreign exchange rate differences

√

...

...

...

11

Benefits of minority shareholders

√

12

Convertible debts

...

...

...

√

13

Entire decrease or increase of the securities in financial investment target

√

√

1A

...

...

...

B

Short-term assets

I

Cash and money equivalents

...

...

...

II

Short-term financial investments

1.

Short-term investment

...

...

...

Securities with market latene risks as prescribed in clause 2, Article 8

Securities be deducted from liquidity as prescribed in clause 5, Article 5

...

...

...

2.

Provision for the diminution in value of short-term investment (*)

III

Short-term receivables

...

...

...

1.

Receivables from customers

Receivables from customers having the remaining payment period of 90 days or less

...

...

...

Receivables from customers having the remaining payment period of over 90 days.

√

2.

Advances to suppliers

√

...

...

...

3.

Short-term internal receivables

Internal receivables with the remaining payment period of 90 days or less

...

...

...

Internal receivables with the remaining payment period of over 90 days

√

4.

Securities trading activity receivables

...

...

...

Securities trading activity receivables with the remaining payment period of 90 days or less

Securities trading activity receivables with the remaining payment period of over 90 days

√

5.

...

...

...

Other receivables with the remaining payment period of 90 days or less

Other receivables with the remaining payment period of over 90 days

...

...

...

√

6.

Provision for short-term bad debts (*)

IV

Inventory

...

...

...

√

V

Other short-term assets

1.

Short-term prepayments

...

...

...

√

2.

Deductible VAT

3.

Tax and receivables of the State

...

...

...

4.

Other short-term assets

4.1

Advances

...

...

...

Advances with the remaining term of refund of 90 days or less

Advances with the remaining term of refund of over 90 days

...

...

...

4.2

Other receivables, other short-term assets

√

1B

Total

...

...

...

Long-term assets

I

Long-term receivables

...

...

...

Long-term receivables from customers

...

...

...

√

2.

Business capital in affiliated units

√

3.

Internal long-term receivables

...

...

...

Internal long-term receivables with the remaining payment period of 90 days or less

Internal long-term receivables with the remaining payment period of over 90 days

...

...

...

4.

Other long-term receivables

Other long-term receivables with the remaining payment period of 90 days or less

...

...

...

Other long-term receivables with the remaining payment period of over 90 days

√

1.5

Provisions for long-term bad debts (*)

...

...

...

II

Fixed assets

√

III

Investment real estate

...

...

...

IV

Long-term financial investments

1.

Investment in subsidiaries

...

...

...

2.

Investment in associated companies, joint-venture companies

√

3.

Long-term securities investment

...

...

...

Securities with market latene risks as prescribed in clause 2, Article 8

Securities deducted from liquidity as prescribed in clause 5, Article 5

...

...

...

4.

Other long-term investment

√

5.

(*) Provision for long-term financial investment markdown

...

...

...

V

Long-term assets

√

The asset targets are considered an exclusion in annual financial statement audited without being deducted as prescribed in Article 5

...

...

...

1C

Total

LIQUIDITY = 1A-1B-1C

Note:    1) Mark √ is the targets that need calculation

            2) Upon determining the deduction percentage from the liquidity (Section B, C), the securities trading organizations are adjusted to reduce the deducted value as follows:

...

...

...

- For assets which are secured by customers’ assets (such as margin trading contract, trading of purchase with commitment of resale that the securities trading organization is the buyer) upon calculating deduction, the smallest value of the following values is reduced: the market value of the collateral determined in accordance with clause 6, Article 9, the book value.

In which the book value is the remaining value of the collateral (in case of fixed assets) at the time of contract commitment or the value determined by the internal method of the securities trading organization at the time of contract commitment (in case of other assets)

II. RISK VALUE WORKSHEET

A. MARKET RISK

Investment items

Risk coefficient

Risk scale

Risk value

(1)

...

...

...

(3)= (1)x(2)

I. Cash and equivalents of cash, money market instruments

1.

Cash (VND)

...

...

...

2.

Money Equivalents

3.

Valuable papers, transferable instrument on currency market

...

...

...

II. Government bond

4.

Government bond without interest

5.

...

...

...

5.1

Government bond, Government bond of countries in OECD bloc or sponsored by Government or Central Bank of the countries in this bloc. The bond issued by international organizations IBRD, ADB, IADB, AfDB, EIB and EBRD.

5.2

...

...

...

The bond for projects that is guaranteed by the Government and Ministry of Finance with the remaining maturity time from 01 to 05 years.

...

...

...

III. Corporate bond

6.

The listed bond has the remaining maturity time of less than 01 year, including convertible bond

...

...

...

...

...

...

7.

...

...

...

IV. Stocks

8.

9.

...

...

...

10.

11.

...

...

...

12.

V. Certificate of securities investment fund

...

...

...

13.

14.

...

...

...

15.

16.

Securities are cancelled  from listing and trading

...

...

...

VII. Other securities

17.

Share, capital contribution and other types of securities

VIII. Increased risk ( if any)

...

...

...

Securities code

Rate of increase

Risk scale

Risk value

1.

….

...

...

...

……..

A. TOTAL MARKET RISK VALUE (A= I+II+III+IV+V+VI+VII+VIII)

B. RISK PAYMENT

Type of transaction

Risk value

...

...

...

(1)

(2)

(3)

(4)

(5)

(6)

I. Risk before payment term

1.

...

...

...

2.

...

...

...

3.

Securities borrowing

...

...

...

4.

Contract of securities purchase with resale commitment

...

...

...

5.

Contract of securities sale with redeem commitment

...

...

...

6.

Contract of margin purchase and loan (lending to customer for securities purchase)/the economic agreements with the same nature

...

...

...

II. Payment overdue risk

Overdue time

...

...

...

Risk scale

Risk scale

1.

2.

...

...

...

3.

31 – 60 days after the term of securities payment and transfer

4.

...

...

...

III. Increased risk ( if any)

Detailed to each loan, to each partner

Increase rate

Risk scale

Risk value

1

…….

...

...

...

B. TOTAL PAYMENT RISK VALUE(B=I+II+III)

C. OPERATION RISK (CALCULATING WITHIN 12 MONTHS)

I.

Total of operation costs arising within 12 months

Giá trị Value

II.

...

...

...

1. Depreciation cost

2. Provision for the markdown of short-term securities investment

3. Provision for the markdown of long-term securities investment

4. Provision for bad receivables

III.

Total costs after deduction

(III = I – II)

...

...

...

25% Total costs after deduction (IV = 25% III)

V.

20% Legal capital of the securities trading organization

C. TOTAL OPERATION RISK VALUE (C=Max {IV, V})

D. TOTAL RISK VALUE (A+B+C)

...

...

...

(1): The value of settlement risk for Government, issuing organizations guaranteed by Government, Ministry of Finance, State Bank, Government and Central Bank of countries of OECD bloc, People’s Committee of central-affiliated provinces and cities

(2): The value of settlement risk for Securities Exchange, Securities Depository Center

(3): The value of settlement risk for credit organization, financial organization, securities trading organization that are established in countries of OECD bloc

(4): The value of settlement risk for credit organization, financial organization, securities trading organization that are established outside countries of OECD bloc

(5): The value of settlement risk for credit organization, financial organization, securities trading organization that are established and operating in Vietnam

(6): The value of settlement risk for other organizations and individuals.

III. SUMMARY OF RISK TARGETS AND LIQUIDITY

No.

Targets

...

...

...

Note (if any)

1.

Total market risk value

2.

Total payment risk value

...

...

...

3.

Total operation risk value

4.

Total risk value (4=1+2+3)

5.

...

...

...

6.

Liquidity adequacy ratio (6=5/4)

ANNEX 6:

...

...

...

(Together with the December 31, 2010 Circular No. 226/2010/TT-BTC of Minister of Finance, prescribing prudential ratios and remedies to be taken by securities-trading institutions that fail to achieve these ratios)

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
---------------

CERTIFICATE FOR REGISTRATION OF CONVERTIBLE BONDS, PREFERRED STOCKS, DEBTS FOR SUPPLEMENT OF LIQUIDITY/PAYMENT PRIOR TO PAYMENT TERM

To: State Securities Commission

1.        Name of securities trading organization:…………………

...

...

...

3.        Number of license for establishment and operation ........ issued by the State Securities Commission on ……

4.        Legal representative:………………………………………..

5.        Use value of convertible bonds, preferred stocks, debts or premature payment amount………

6.        Partners of payment receipt (the lender)

7.        Reason for registration or payment

8.        Estimated date of payment

9.        Value of convertible bonds, preferred stocks, debts before and after payment.

10.     The additional capital resource consistent with regulations or treatment plan  ensure the maintain the liquidity adequacy ratio of securities trading organizations  (specify details)

11.    The liquidity adequacy ratio after payment of redeem or payment

...

...

...

Attached documents

- Meeting minutes, Resolution of Management Board/Member Board/Decision of owner

- Valid copy of the capital loan contract or equivalent documents

Legal representative of securities trading organization

(Sign and seal)