Quyết định 108/2008/QD-BTC

DECISION

ISSUING REGULATIONS ON ORGANIZATION AND MANAGEMENT OF TRADING UNLISTED PUBLIC COMPANY SECURITIES ON HANOI SECURITIES TRADING CENTRE

THE MINISTER OF FINANCE

Pursuant to Law 70 on Securities dated 29 June 2006;
Pursuant to Decree 77/2003/ND-CP of the Government dated 1 July 2003 on functions, duties, powers and organizational structure of the Ministry of Finance;
Pursuant to Decree 14/2007/ND-CP of the Government dated 19 January 2007 implementing the Law on Securities;
Pursuant to Official Letter 4409/VPCP-KTTH of the Government Office dated 7 July 2008 on preparation to commence the securities trading market for unlisted public companies;
On the proposal of the Chairman of the State Securities Commission;

DECIDES:

Article 1

To issue with this Decision the Regulations on organization and management of trading unlisted public company securities on Hanoi Securities Trading Centre (HASTC).

Article 2

This Decision shall be of full force and effect fifteen (15) days after the date of its publication in the Official Gazette.

Article 3

The chairman of the State Securities Commission, the Head of the Office of the Ministry of Finance and heads of entities under the Ministry, the Director of HASTC and other entities involved shall be responsible for implementation of this Decision.

REGULATIONS

ON ORGANIZATION AND MANAGEMENT OF TRADING UNLISTED PUBLIC COMPANY SECURITIES ON HANOI SECURITIES TRADING CENTRE
(Issued with Decision 108/2008/QD-BTC of the Minister of Finance dated 20 November 2008)

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope

These Regulations provide for organization and management of trading unlisted public company securities comprising shares and convertible bonds on the Hanoi Securities Trading Centre (hereinafter abbreviated to HASTC) and public company securities delisted on the Ho Chi Minh City Stock Exchange (hereinafter abbreviated to HOSE).

Article 2.- Interpretation of terms

In these Regulations, the following terms shall be construed as follows:

1. Registered trading company means a public company with securities which are registered for trading on HASTC.

2. Registered trading system means the system for trading public company securities [i.e. securities of registered trading companies] on HASTC.

3. Member of the registered trading system (hereinafter abbreviated to member) means a securities company with permission from HASTC to conduct trading on the registered trading system of HASTC.

4. Undertaking to provide assistance means a member undertakes to a public company to conduct procedures on behalf of such company in order to register trading of [the public company's] securities on the registered trading system of HASTC, and to assist such company to strictly discharge its obligation to disclose information in accordance with law, and that the member in fact implements such undertaking.

5. Assisting member means a member responsible to assist a public company conducting registrationfor trading.

6. Trading representative of a member of HASTC (hereinafter abbreviated to trading representative) means the employee/s appointed by such member and to whom HASTC issues a trading representative card and permits to act as representative of the member in placing orders into the registered trading system of HASTC.

Article 3.- Securities registered for trading

Securities registered for trading on HASTC shall comprise shares and convertible bonds for which approval has been granted for their registration for trading on HASTC.

Article 4.- Members

1. Members must comply with rules issued by HASTC on membership of the registered trading system.

2. An assisting member for the securities of any registered trading company shall be responsible to assist such company to discharge its obligation to disclose information in accordance with law.

Article 5.- Holding trading

Trading of securities shall be conducted via members; and information about transactions must be notified via the registered trading system of HASTC in order to be collated and included in general [overall] trading results.

Article 6. Disclosure of information

1. Public companies, members and HASTC must promptly disclose complete and accurate information in accordance with the provisions in Section 3 of Chapter II of these Regulations.

2. Public companies registering for trading on HASTC shall be liable for the accuracy, completeness and truthfulness of the information items which they disclose. Assisting members for securities of a public company shall be liable within the relevant scope for disclosure of information by such public company.

3. HASTC shall provide specific rules on implementation of disclosure of information by public companies registering for trading on HASTC.

Chapter II

SPECIFIC PROVISIONS

Section 1 REGISTRATION FOR TRADING

Article 7.- Conditions in order to register for trading

Securities may be registered for trading on HASTC when they satisfy all the following conditions:

1. They are securities of a public company as defined in article 25 of the Law on Securities and are unlisted on HASTC or have been delisted on HOSE.

2. They are securities which have been registered for depository at a Securities Depositary Centre (hereinafter abbreviated to SDC).

3. They are securities for which one member undertakes to provide assistance.

Article 8.- Application file to register for trading

An application file from an unlisted public company to register its securities for trading shall comprise the following documents:

1. Request to register trading of securities on HASTC (on the standard form in Appendix 1A or 1B

issued with these Regulations).

2. Contract with undertaking to provide assistance ["assistance contract"] on the standard form stipulated by HASTC, except where a member conducts procedures to register trading of the securities of such member's own company.

3. List of disclosed information items (on the standard form in Appendix 2 issued with these Regulations).

4. Certificate of registration of securities depository issued by the SDC.

Article 9.- Procedures for registering for trading and for de-registration

1. Any company which registered with the State Securities Commission (hereinafter abbreviated to SSC) as a public company prior to the date on which these Regulations take effect, must conduct procedures to register depository of its securities with the SDC within six (6) months after the date on which these Regulations take effect.

2. Any company which registers with the SSC as a public company after the date on which these Regulations take effect, must register depository of its securities with the SDC within six (6) months after the date on which it registered with the SSC as a public company.

3. HASTC shall provide specific rules on procedures for registering for trading and for de-registration.

Article 10.- Assisting members

1. Assisting members must sign an assistance contract with a registered trading company on the standard form issued by HASTC.

2. Assisting members shall have the following obligations:

(a) To ensure that the securities of the public company for which they have provided the undertaking satisfy the conditions stipulated by law and in these Regulations to be placed into the registered trading system of HASTC.

(b) To act on behalf of the public company for which they have provided the undertaking in conducting procedures to register trading of the [public company's] securities on the registered trading system of HASTC.

(c) To assist the registered trading company for which they have provided the undertaking, to discharge its obligation to disclose information as follows:

- To regularly activate such company to make disclosure of information correctly in accordance with law;

- To assist such company with the methods for disclosing information and the contents of disclosed information on request from such company;

- To also disclose on such assisting member's own website the disclosed information of the public company for which it has provided the undertaking.

(d)If an assisting member has discharged its liability to assist the registered trading company to disclose information but such company has still not correctly discharged the obligation to disclose information, then within twenty four (24) hours from the time the law requires that information be disclosed, the assisting member must provide written notice to the SSC and to HASTC about this problem, enclosing evidence that the assisting member correctly discharged its obligation to provide assistance.

(dd) An assisting member must report to HASTC within twenty four (24) hours from the time such member terminates its role as the member which has undertaken to provide assistance to a registered trading company, or within twenty four (24) hours from the time it signs an assistance contract as the new assisting member for a registered trading company.

Section II. ORGANIZATION AND MANAGEMENT OF TRADING

Article 11.- Trading days and trading times

HASTC shall hold trading on its registered trading system from Monday to Friday inclusive each week, except on days which are holidays as defined in the Labour Code. HASTC shall regulate in detail the daily trading hours after receipt of approval from the SSC. HASTC may also issue a decision changing its daily trading hours if necessary, after receipt of approval from the SSC.

Article 12.- Suspension of trading activities

1. HASTC may suspend trading activities in the following circumstances:

(a) Normal trading cannot be conducted due to a breakdown in the registered trading system.

(b) There is a breakdown in the trading orders transmission system of one quarter of the number of members.

(c) The SSC requests HASTC to suspend trading in order to protect the interests of investors or to protect the national economy.

(d) In other cases of force majeure such as a disaster, a fire, or some other objective breakdown.

2. Trading activities shall continue immediately after any of the above events are remedied. If any such event is unable to be remedied, then the trading session shall be deemed to have terminated at the time of completion of the last transaction preceding such event.

Article 13.- Suspension of trading securities registered for trading

1. HASTC may consider suspending trading of securities registered for trading on occurrence of one of the following:

(a) There is an abnormal fluctuation in the price and volume of securities being traded.

(b) A registered trading company commits a serious breach of the regulations on disclosure of information.

(c) There is a share split or share consolidation, or demerger or merger of an enterprise.

(d) At the request of a registered trading company which has undisclosed information which may impact on trading of securities by the registered trading company.

(dd) A registered trading company terminates its assistance contract with an assisting member and has not yet signed another such contract with another member.

(e) In other necessary cases in order to protect the interests of investors or to ensure market stability.

2. HASTC shall, in cases where it is necessary to suspend trading, provide written notice of suspension of trading to registered trading companies, and shall also disclose information about such suspension on its own information disclosure media.

3. Any registered trading company whose securities are suspended from trading must provide an explanation and disclose information at the request of HASTC.

Article 14.- Trading methods

1. HASTC shall apply the trading method of reaching agreement on a transaction of securities traded on the registered trading system, which trading method shall take two forms:

(a) Electronic agreement being the trading form whereby a trading representative places an order on confirmed transaction conditions, and then selects the corresponding [or matching] order in order to conclude the transaction.

(b) Conventional agreement being the trading form whereby a purchaser and seller agree between themselves on the transaction conditions, and the trading representative places this information into the registered trading system in order to conclude the transaction.

2. In the case of the electronic agreement trading form, members shall be responsible to immediately implement investors' orders within HASTC trading times.If there is no corresponding order to conclude a transaction, then the member must immediately place the order into the registered trading system, giving priority to the earliest order in point of time.

3. In the case of the conventional agreement trading form, members shall be responsible to immediately transfer the result of the agreed transaction into the registered trading system within HASTC trading times, giving priority to the earliest order in point of time.

4. HASCT may, in necessary cases, make a decision to change or supplement the trading methods applicable to each class of securities after receipt of approval from the SSC.

Article 15.- Confirmation and rescission of transactions

1. A securities transaction shall be [deemed to be] confirmed when the registered trading system records confirmation of the transaction by the agreement method, except where there is some other regulation issued by the SSC.

2. The purchaser and seller shall be liable to make payment of a confirmed securities transaction.

3. If a transaction which has already been confirmed has a seriously adverse impact on the interests of investors or on all trading on the market, then HASTC may issue a decision amending or rescinding such transaction and shall report thereon to the SSC .

Article 16.- Deposits for transactions

1. When an investor places a securities selling order, the investor must have the full amount of the securities for which the order is placed in the securities trading account which the investor has opened with a member.

2. When an investor places a securities purchase order, the investor must provide a monetary deposit at the level agreed with the member, and must ensure ability to make payment for the transaction within the stipulated time-limit.

Article 17.- Trading of securities by investors

1. Any one investor shall be permitted to open only one securities trading account with only one securities company. An investor who has already opened a listed securities trading account may immediately use such account to trade [unlisted] securities which have been registered for trading.

2. An investor shall not be permitted to purchase and then sell the same class of shares on the same trading day.

3. If an investor opens a securities depository account and a monetary account with a depository member being a commercial bank which the SSC has licensed for depository activities, then the investor must place securities trading orders via a member of the registered trading system and must make payment for transactions via the depository member with whom the investor has its securities account.

Article 18.- Trading by foreign investors

1. The ownership ratio of foreign investors of shares registered for trading shall be implemented in accordance with a decision of the Prime Minister of the Government.

2. HASTC shall provide guidelines on procedures for foreign investors to participate in trading.

Article 19.- Unit for trading

No trading unit shall be stipulated for securities trading by registered trading companies. The minimum transaction volume shall be ten (10) shares or ten (10) bonds.

Article 20.- Unit for listing prices

1. The unit for listing share prices shall be one hundred (100) dong.

2. No unit for listing prices shall be stipulated for bonds.

Article 21.- Par value of securities

1. The par value of shares shall be ten thousand (10,000) dong per share.

2. The par value of bonds shall be one hundred thousand (100,000) dong per bond.

3. Any public company whose securities have a par value different from that stipulated in clauses 1 or 2 above, must convert the par value prior to registering for trading.

Article 22.- Price fluctuation range

The price fluctuation range on any one trading day shall be:

1. Plus or minus () ten per cent (10%) in the case of trading shares, which range may be changed pursuant to a decision of the SSC depending on the market situation.

2. Price fluctuation range shall not apply to trading bonds.

Article 23.- Reference price

1. HASTC shall calculate and announce daily reference prices of securities registered for trading.

2. The reference price of shares registered for trading shall be the weighted average transaction price

by the electronic method on the most recent trading day.

3. In a case of shares newly registered for trading, HASTC shall only receive orders by the electronic agreement method on the first trading day and a price fluctuation range shall not apply. If there are no implementing prices on the first trading day, a reference price shall be confirmed on the next following trading day up until a transaction price is confirmed on the system.

4. In the case of trading shares [on a day when] they do not bear dividends or accompanying rights, the reference price on trading days when the shares do not bear dividends shall be determined on the principle of taking the weighted average transaction price by the electronic agreement method on the last trading day and adjusting it to allow for the value of dividends receivable or of accompanying rights.

5. In the case of a share split or share consolidation, the reference price on the trading day after such split or consolidation shall be determined on the principle of taking the weighted average transaction price by the electronic agreement method on the last trading day prior to the share split or share consolidation and adjusting it in accordance with the ratio of the share split or share consolidation.

6. In other circumstances, HASTC shall issue a decision [on reference prices] after receipt of approval from the SSC.

Article 24.- Period of effectiveness of orders

An order offering to purchase or sell by the electronic agreement method shall be effective as from the time it is placed into the registered trading system up until expiry of trading time on such system or up until the time when the order is rescinded.

Article 25.- Amendment or rescission of orders during trading hours

1.Investors shall be permitted to amend or rescind orders offering to purchase or sell by the electronic agreement method. Trading representatives shall implement the amendment or rescission of electronic agreement orders of clients in accordance with the rules of HASTC on amending or rescinding agreed transaction orders.

2. An agreed transaction already implemented in the system shall not be permitted to be rescinded.

3. If during trading hours a trading representative incorrectly places [into the system] an agreed transaction for an investor, the trading representative shall be permitted to amend the agreed transaction but must present the original order of the investor, and both the other party to the transaction and HASTC must agree to the amendment. Amendment of agreed transactions by members must comply with the rules issued by HASTC on amendment of agreed transactions.

Article 26.- Rectification of mistakes after transactions

If at the end of trading hours a member discovers a trading mistake due to a mix-up or error during the course of accepting the order, of transmitting it or placing it into the registered trading system, then the member shall notify HASTC of the trading mistake and the member shall be liable to resolve its own trading mistakes with investors.

Rectification of mistakes after transactions shall be implemented on the principle of eliminating the result of the transaction subject to the mistake. In a number of special cases, HASTC and the SDC may consider permitting a member to amend a transaction.

Members must comply with the rules of HASTC and the SDC on rectification of mistakes after transactions.

Article 27.- Payment of compensation for loss arising from transaction mistakes

1. If a member causes a transaction mistake and thereafter HASTC rescinds the payment result, such member must pay compensation for loss caused to the opposite trading member.

2. The two members involved in the transaction subject to a mistake shall reach agreement on the amount of compensation payable, which shall not exceed ten per cent (10%) of the value of the transaction subject to the mistake.

Section 3 DISCLOSURE OF INFORMATION

Article 28.- Disclosure of information by registered trading companies

1. Registered trading companies shall discharge the obligation to disclose information applicable to public companies as stipulated in Section 2 of Circular 384. Registered trading companies shall disclose information on the stipulated information disclosure media, and shall simultaneously send such information by fax, via the post office and by email to the electronic address of the HASTC.

2. With regard to information relating to the last registration date for existing shareholders to exercise their rights, registered trading companies must report and lodge adequate data as the relevant legal basis with HASTC at least ten (10) business days prior to the final registration date in order to discharge their obligation to disclose information.

3. With regard to information which must be disclosed within twenty four (24) or seventy two (72) hours, registered trading companies must send such information within the 24 or 72 hour time-limit as from the date the event occurs in order for HASTC to announce such information, and at the same time the company concerned shall disclose such information on the stipulated information disclosure media.

4. Registered trading companies shall be responsible to disclose information within twenty four (24) hours from the time they receive a report prescribed in article 31 of these Regulations.

Article 29.- Disclosure of information by members

1. Members shall discharge the obligation to disclose information applicable to securities companies as stipulated in Section 5 of Circular 38.

2. Members shall promptly provide complete and accurate information on the information disclosure media of their company to clients about securities registered for trading, about registered trading companies and about the status of trading on HASTC, including information about on-line trading.

3. Members shall regularly update information about securities traded, about registered trading companies, about information disclosed by management bodies and about rules and regulations relevant to trading on HASTC on the information disclosure media of their companies immediately after they receive any information from registered trading companies, from the SCC or from HASTC.

4. Assisting members shall disclose on their websites information disclosed by public companies for which such members act as assisting members.

Article 30.- Disclosure of information by HASTC

HASTC shall discharge the obligation to disclose information as stipulated in Section 8 of Circular 38.

Article 31.- Reporting by shareholders of registered trading companies

1. Reports by members of the board of management, board of directors, chief accountant, members of the board of controllers and related persons:

Members of the board of management, board of directors, chief accountant and members of the board of controllers of a registered trading company and related persons intending to trade shares of such company must provide a written report to the company and to HASTC at least one business day prior to implementing the transaction.

The contents of the report shall be as stipulated in Appendix 3 issued with these Regulations.

2. Reporting by major shareholders:

(a) Any organization, individual or group of related persons becoming a major shareholder/s of a registered trading company must report on such ownership to HASTC within seven (7) business days from the date of becoming a major shareholder, on the standard form in Appendix 4 issued with these Regulations.

(b) Any organization, individual or group of related persons being a major shareholder and who change the volume of shares they own by more than one per cent (1%) of the [total] volume of the same class of currently circulating shares must provide a report on the change of major share ownership to HASTC within seven (7) business days from the date of the change, on the standard form in Appendix 5 issued with these Regulations.

3. Reporting by founding shareholders:

(a) A founding shareholder shall, at least one day prior to conducting a transaction, send a report to HASTC about the proposed transaction of such founding shareholder and specify the names and trading account code numbers of the assignor and assignee of the proposed transaction. In the case of an assignment to an assignee who is not another founding shareholder, there must also be a resolution of the general meeting of shareholders.

(b) A founding shareholder must, within three business days from completing the above-mentioned transaction, provide a further written report to HASTC on the result of the transaction, specifying the volume traded, the names of the assignor and assignee, and the time of the transaction. In a case where a proposed transaction is not in fact implemented, the founding shareholder must provide a written report to HASTC within three days of the expiry date of the proposed period for conducting the transaction.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 32.- Implementing provision

1. HASTC shall issue rules and professional procedures consistent with the provisions in these

Regulations.

2. The Minister of Finance shall make a decision on any amendments or additions to these Regulations.

LIST OF APPENDICES

(Not translated)