Thông tư 17/2016/TT-NHNN

CIRCULAR

ON MONEY BROKERAGE OPERATIONS OF COMMERCIAL BANKS AND BRANCHES OF FOREIGN BANKS

Pursuant to the Law on the State bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Government's Decree No. 156/2013/ND-CP dated November 11, 2013 defining the functions, tasks, entitlements and organizational structure of the State bank of Vietnam (hereinafter referred to as the State Bank);

At the request of the Director of the Financial policy department;

The Governor of the State Bank promulgates a Circular on money brokerage operations of commercial banks and branches of foreign banks.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular deals with money brokerage services of commercial banks and branches of foreign banks provided for customers.

Article 2. Regulated entities

1. Money brokers (hereinafter referred to as brokers) are commercial banks and branches of foreign banks that are permitted to provide money brokerage services by the State Bank as specified in the establishment and operation license issued to the commercial banks or the establishment license issued to the branches of foreign banks by the State Bank.

2. Customers provided with money brokerage services (hereinafter referred to as customers) are credit institutions, branches of foreign banks established and operated in accordance with the Law on credit institutions and other financial institutions.

Article 3. Interpretation of terms

For the purposes of this Circular, these terms below shall be construed as follows:

1. Money brokerage (hereinafter referred to as brokerage) is the provision of intermediary services against some brokerage fees to arrange and facilitate banking operations and other business operations as prescribed in Article 5 of this Circular between credit institutions, branches of foreign banks and other financial institutions.

2. Other financial institutions are financial institutions prescribed in the Law on prevention and fighting money laundering.

3. Brokerage fee is a sum of money that a customer pays to the broker for the provision of brokerage services.

Article 4. Rules of brokerage

1. The commercial bank or the branch of foreign bank must provide internal regulations on brokerage operation in accordance with this Circular and relevant law provisions, which at least contain: procedures for brokerage performance; scope of responsibility and power of persons related to the brokerage operation; and management of risks to the brokerage operation.

Within 10 days from the date on which the internal regulations are issued, amended or replaced, the commercial bank or the branch of foreign bank must send such internal regulations, directly or by post, to the Bank Supervision and Inspection Agency of the State Bank.

2. The brokerage services must be provided in accordance with this Circular and relevant regulations of law.

3. At least one party being customer is a credit institution, branch of foreign bank established and operated in accordance with the Law on credit institutions.

4. Ensure the faithfulness, objectiveness and customer’s legal interests:

a) Information about the transaction provided with the brokerage and other information permitted to disclose by the customer must be reflected accurately and sufficiently;

b) The commercial bank or the branch of foreign bank may not provide falsified information or interfere the transaction in any form to falsify the information leading the inaccurate evaluation of the customer to the transaction provided with the brokerage and/or threatening the customer’s legal interests;

5. The commercial bank or the branch of foreign bank may not provide information about customers and transactions provided with the brokerage for a third party, except for the request of competent authority as prescribed by law or with the consent of the customer.

6. The commercial bank or the branch of foreign bank may not act as both a broker and a contracting party in a transaction permitted to provide brokerage for the customer.

Chapter II

SPECIFIC PROVISIONS

Article 5. Scope of brokerage

Commercial bank and the branches of foreign banks are permitted to provide brokerage services in banking operation and other business operation as prescribed in the Law on credit institutions and guidelines of the State Bank.

Article 6. Methods of brokerage service provision

The broker is able to provide brokerage services through direct transactions or indirectly through computer network and/or telephone for customers, or any of other methods agreed upon by the parties in conformity with the parties' condition and in accordance with regulations of law.

Article 7. Brokerage contracts

A broker and a customer may enter into a brokerage contract according to their agreement, in accordance with this Circular and relevant law provisions, at least containing:

1. Details of broker and customer.

2. Method of brokerage service provision

3. Brokerage fee and other expenses (if any).

4. Method(s) of payment, deadline for payment.

5. Rights and responsibilities of contracting parties.

6. Liability for breach(es) of the contract.

7. Provisions of dispute handling.

8. Validity of contract.

9. Other agreements in accordance with this Circular and relevant law provisions.

Article 8. Brokerage fees

Brokerage fees and other expenses shall be agreed upon by the broker and the customer.

Article 9. Keeping records

The broker must prepare and keep records of the brokerage operation, including:

1. Brokerage contracts.

2. Other documents relating to the brokerage transactions.

Chapter III

IMPLEMENTATION

Article 10. Effect

1. This Circular comes into force from August 22, 2016, which replaces Decision No. 351/2004/QD-NHNN dated April 7, 2004 of the Governor of the State Bank promulgating Regulations on money brokerage.

2. With regard to any of brokerage contracts concluded before the effective date of this Circular, the credit institution or the branch of foreign bank shall decide whether to keep execute such contract in accordance with regulations of law at the time of conclusion of the contract or make amendments to the contract in accordance with this Circular.

Article 11. Implementation

1. Bank Supervision and Inspection Agency shall inspect and supervise the implementation of this Circular and take actions against violations within their competence.

2. The Chief officers, the Director of the Financial policy department, Heads of affiliates of the State Bank of Vietnam, Director of branches of the State Bank of provinces and central-affiliated cities, Presidents of the Board of Directors, Presidents of the Member assembly, General Directors (Directors) of credit institutions and branches of foreign banks shall implement this Circular./.