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1. Business forms of securities companies
In accordance with the provisions prescribed at Clause 1, Article 4 of the Law on Securities 2019, securities mean assets, including the following types:
- Stocks, bonds, fund certificates;
- Warrants, covered warrants, rights, depositary receipts;
- Derivatives;
- Other types of securities
At the same time, Clause 28, Article 4 of this Law prescribes 07 forms of the securities business, within that, securities companies may be licensed to carry out one, several, or all of the following business operations:
- Securities brokerage: means acting as an intermediary to buy or sell securities for customers
- Securities dealing means buying or selling securities by a securities company for itself.
- Securities issuance underwriting: means a commitment made by an issuance underwriting institution with an issuing institution to buy part or the whole of the latter’s securities amount for resale or to buy the latter’s amount of undistributed securities or to try its utmost to distribute the latter’s amount of securities that need to be issued.
- Securities investment consultancy means the supply of analysis results, disclosure of analysis reports, and provision of recommendations related to securities purchase, sale or holding by securities companies to customers.
Note:
- Securities companies may be licensed to carry out securities dealing operation only when being licensed to carry out securities brokerage operation.
- Securities companies may be licensed to carry out securities issuance underwriting operations only when being licensed to carry out securities dealing operations.
2. Conditions for establishing securities companies
Clause 2, Article 71 of the Law on Securities 2019 points out clearly that Securities companies may be organized as limited liability companies or joint-stock companies.
Accordingly, the establishment of securities companies must satisfy all the conditions as follows (Article 74, the Law on Securities 2019):
- Capital-related conditions: Contributions to the charter capital of a securities company shall be made in Vietnam dong; the minimum charter capital for each business operation of a Vietnam-based securities company must comply with the Government’s regulations. In particular:
- Securities brokerage: VND 25 billion
+ Securities dealing: VND 50 billion
+ Securities issuance underwriting: VND 165 billion
+ Securities investment consultancy VND 10 billion
- Conditions concerning shareholders or capital-contributing members:
+ Individual shareholders or capital-contributing members: do not fall into cases of being not allowed to establish and manage enterprises in Vietnam;
+ Institutional shareholders or capital-contributing members: Have the legal person status and lawfully operate; have operated at a profit for 2 years preceding the year of application for a license, and have the latest annual financial statement audited with unqualified opinions;
Note that, Shareholders or capital-contributing members own at least 10% of the charter capital of 1 securities company and their affiliated persons (if any) only own up to 5% of the charter capital of another securities company.
- Conditions concerning physical foundations:
+ Having a working office for securities business activities;
+ Having sufficient physical and technical foundations, devices, office equipment and technological systems.
- Personnel-related conditions:
Have the Director General (Director), at least 3 staff members with securities practice certificates, and at least 1 compliance controller. The Director-General (Director) must satisfy the criteria as prescribed.
- A draft charter
3. Dossiers of application for the grant or renewal of establishment and operation licenses to securities companies
Pursuant to the Article 176, the Decree No. 155/2020/ND-CP, the Dossiers of application for the grant or renewal of establishment and operation licenses to securities companies includes:
- Documents for issuance of establishment and operation license of the securities company
- A written explanation of physical and technical foundations to ensure the operations of a securities company.
- Bank’s confirmation on charter capital at the frozen accounts opened at banks.
- A list of Chief Executive Officer and securities practitioners at the headquarters and the operation network is attached with the copies of the Securities practicing certificate.
- List of shareholders and capital-contributing members with a copy of personal information such as identity cards or passports for individual and business registration certificates or equivalent documents for entities.
- The latest financial statement is audited by an audit firm accredited by the competent state agencies of the shareholders and capital-contributing members who are the legal entity from 10% and above
- A draft company charter
- The plan in the first 3 years is suitable for the professional business to promulgate professional processes, internal control processes, and risk management processes.
