Thông tư 203/2015/TT-BTC

CIRCULAR

GUIDELINES FOR TRADING ON SECURITIES MARKET

Pursuant to the Law on securities No. 70/2006/QH11 dated June 29, 2006;

Pursuant to the Law No. 62/2010/QH12 dated November 24, 2010 on amending and supplementing a number of articles of the Law on Securities;

Pursuant to the Government’s Decree No.215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and organizational structure of Ministry of Finance;

Pursuant to the Government’s Decree No. 58/2012/ND-CP dated July 20, 2012 stipulating in detailed and providing guidelines for implementing a number of articles of the Law on Securities and the Law on amending and supplementing a number of articles of the Law on Securities;

Pursuant to the Government’s Decree No. 60/2015/ND-CP dated June 26, 2015 amending and supplementing a number of articles of the Government’s Decree No. 58/2012/ND-CP dated July 20, 2012 stipulating in detailed and providing guidelines for implementing a number of articles of the Law on Securities and the Law on amending and supplementing a number of articles of the Law on Securities;

At the request of the Chairman of the State Securities Commission of Vietnam (referred to as SSC);

The Minister of Finance promulgates a Circular to provide guidelines for trading on securities market

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides guidelines for trading in securities that have been listed or registered for trading on the Stock Exchange (referred to as SE).

2. This Circular applies to the investors, depository members, trading members, securities companies, asset management companies, the SE, the Vietnam Securities Deposit (referred to as VSD) and other relevant organizations and individuals.

Article 2. Interpretation of terms

In this Circular, these terms are construed as follows:

1. Trading members refer to securities companies approved by the SE to become trading members.

2. Trading system is the IT system serving securities trading activities on the SE.

3. Order transfer system carries out the transfer of the investors’ trading orders from the trading members to the SE.

4. Price fluctuation limit refers to the price fluctuation limit of securities setting in trading date which is calculated by percentage (%) compared with the preference price.

5. Preference price is the price determined by the SE and used as the base for determining the highest price (ceiling price) and the lowest price (floor price) in the trading date.

6. Order matching method means the trading method whereby transactions are executed by the trading system on basis of matching securities buy and sell orders. The order trading method includes periodic order matching method and continuous order matching method.

7. Agreement method means the trading method whereby trading parties shall, through the trading member, carry out an agreement on requirements for trading on the trading system; or trading parties shall themselves deal and execute the trading and then, their trading results shall be entered into the trading system by the trading member.

8. Margin trading refers to the method of buying securities with money borrowed from the securities company, in which the purchased securities shall be used as collateral for the aforesaid loan.

9. Day trading is the act of buying and selling a type of securities with the same trading volume on the only one account within the same trading day.

10. Buy-in, sell out are the transactions that securities company or investor are forced to carry out to acquire a sufficient amount of securities to return to loan transactions for settlement support or fulfill other regulations of relevant laws.

11. Securities waiting to be transferred are securities that the investor has successfully purchased on the trading system of the SE and are in process of completing ownership transfer procedures.

Chapter II

SPECIFIC PROVISIONS

Article 3. Organization of securities trading

1. The SE organizes securities trading according to the order matching method and agreement method.

a) The order matching method executed on the trading system must ensure the principle of prioritizing price and time;

b) The agreement method executed on the trading system of the SE must comply with the SE’s regulations.

2. The SE organizes trading in listed and registered securities, excluding transfer of ownership out of the trading system in accordance with the law on securities with respect to securities registration, depository, settlement and clearing. The SE is allowed to organize buy-in and sell-out sessions.

3. The SE shall promulgate regulations on securities trading after it has obtained the approval on such regulations from the SSC. The regulations on securities trading must contain detailed regulations on trading time; trading method; methods for determining preference price; securities price fluctuation limit; kinds of trading orders; change or cancellation of trading orders; confirmation or rejection of securities trading; trading suspension; publishing information of trading results and other relevant contents.

4. The VSD shall allocate securities codes for all securities registered at VSD and VSD is also designated to be the unique agency allocating the International Securities Identification Numbers (ISIN) for all securities in Vietnam. Securities codes and ISINs are unanimously used for listing or trading registration.

5. VSD shall, upon the approval of the SSC, promulgate process for correcting trading errors, tacking actions against trading errors and rejecting trading for securities listed or registered for trading on the SE.

Article 4. Suspension of securities trading

1. The SE shall suspend securities trading activities on the whole trading system in the following cases:

a) Trading system or order transfer system of the SE breaks down;

b) In case of force majeure such as acts of god or fire;

c) At the request of the SSC for market stabilization;

d) Other cases that the SE realizes that it’s necessary to suspend trading in securities to protect the investors' benefits upon the SSC’s approval.

2. Suspension of trading in each kind of securities shall comply with the SE’s regulations on securities trading.

3. The SE shall submit reports to the SSC immediately after decision on suspension of securities trading activities has been issued as regulated in point a, b Clause 1 of this Article.

Article 5. Price fluctuation limit

1. The SE shall, upon the SSC’s approval, define the price fluctuation limit.

2. In case of need for market stabilization, the SSC makes decision on change of the price fluctuation limit.

Article 6. General provisions on securities trading account

1. The investor is forced to open securities trading account at securities company to carry out trading in securities on the SE and is also responsible for providing sufficient and accurate information for customer identification during the course of opening trading account.

2. Foreign investors and foreign invested economic organizations applying this circular who are foreign investors in accordance with the investment law and relevant laws must register securities trading codes before securities trading accounts are opened.

3. Each investor shall open the only one trading account at a securities company, except for cases regulated in Clause 4 of this Article, Article 9, Article 10 of this Circular.

4. Asset management companies, securities companies, insurance companies and supervisory banks shall open securities trading accounts in the following principles:

a) Asset management company is allowed to open many trading accounts at each securities company in the following principles:

- One (01) securities trading account is open to carry out its own securities trading activities;

- Two (02) securities trading accounts are opened to manage investment items of entrusting customers, in which, one (01) account serves securities trading activities of domestic entrusting customers and the other one (01) account serves securities trading activities of foreign entrusting customers;

- Trading accounts for investment funds and securities investment companies managed by the asset management company in the principle that each investment fund or securities investment company can use its name to open one (01) trading account at each securities company.

b) Securities company which is established and operated under the law of Vietnam shall be allowed to securities trading accounts in the following principles:

- Securities company that has self-trading operations and is a member of the SE is allowed to open the only one (01) self-trading account right at such securities company, opening any trading account at other securities company is forbidden.

If the securities company stops its self-trading operations but it is still a member of the SE, it can use the opened self-trading account to sell out all owned securities. Such self-trading account must be closed immediately after all securities items have been sold out. If the securities company still remains its self-trading operations but brokerage operations have been stopped or it is no longer a member of the SE, it is allowed to open trading account at other securities companies to carry out the investments.

- Securities company can open trading account at the member establishing ETF (exchange-traded fund) to carry out trading in ETF certificates. This account is used for exchange of component securities for ETF certificates on primary markets and trading in ETF certificates on secondary markets. Other than aforesaid purposes, this account shall not be used for other securities trading activities.

- Other trading accounts as regulated by relevant laws.

c) Foreign securities company is allowed to open trading accounts at each domestic securities company in the following principles:

- One (01) securities trading account is opened to carry out self-trading activities;

- One (01) securities trading account is opened to carry out brokerage activities for other foreign investors.

d) Insurance company that is unlisted or unregistered company and foreign invested capital of which holds from 51% of charter capital is allowed to open two (02) securities trading accounts at each securities company in the following principles:

- One (01) securities trading account is opened to carry out trading using the owner’s equity. Securities acquired from trading on this account shall be governed by the laws on ownership of foreign investors.

- One (01) securities trading account is opened to carry out trading using collected amount of domestic insurance premiums. Securities acquired from trading on this account shall be not subject to the government of the laws on ownership of foreign investors.

dd) Supervisory bank that is ETF market maker is allowed to open two (02) trading accounts at each securities company in the following principles:

- One (01) securities trading account is opened to carry out investment activities of that supervisory bank.

- One (01) securities trading account is opened to carry out market-making activities for ETF certificates.

5. Investor holding securities trading accounts must perform obligations of a majority shareholder if such investor directly or indirectly owns (including authorization and entrustment trading accounts) at least five (5%) or more of either voting stocks of issuer or fund certificates of a closed fund.

6. Securities companies are not allowed to reuse codes of closed accounts to open accounts for new customers. Codes of closed accounts are only reused to open accounts for new customers after ten (10) years as of the closing date.

Article 7. General provisions on securities trading and settlement for securities trading

1. The investor can place sell orders for securities on his depository account in the trading date and securities waiting to be transferred. Selling securities waiting to be transferred shall comply with SSC’s regulations.

2. Except for margin trading and day trading as regulated in Article 9, Article 10 of this Circular, the investor only places buy orders if he has fulfilled required deposit on securities trading account. In case the investor opens depository account at depository bank and trading account at securities company, the investor can place buy orders and the securities company can execute the buy orders when having certificate of settlement guarantee or certificate of depository bank certifying that the depository bank accepts to make settlement for trading in securities executed by the investor.

3. In case the investor opens depository account at depository bank, the securities company shall be responsible for checking and following balance in cashes or securities, comparing such balance with margin requirements, examining validity and legality of the investor's trading orders.

Depository members shall compare trading in securities on the basis of trading results provided by VSD and securities companies.

4. The investor cannot simultaneously place buy orders and sell orders for the same kind of securities within a periodic order matching period, except for orders that have been entered into trading system at preceding continuous trading session, are not yet matched but still valid.

5. Market maker or member establishing ETF can display prices for buying or selling ETF certificates in the same trading session, and display prices for simultaneously buying or selling securities and ETF certificates whose market maker is such member as designated within the same trading session. Such trading must be performed on the market-making account and comply with Article 12 of this Circular.

6. Settlement and transactions for paying money to the investor must be executed through commercial bank. Securities company is not allowed to carry out internal transfer of money among the investors’ accounts.

Article 8. Trading in treasury stocks

1. Listed or registered organizations repurchase or sell treasury stocks on the SE in accordance with the law on securities and relevant documents providing guidance on trading in treasury stocks. The SE shall, upon the SSC’s approval, promulgate regulations on trading in treasury stocks.

2. Except for the cases stated in Clause 7, Clause 8 of this Article, listed or registered organizations are only allowed to repurchase or sell treasury stocks after they have obtained the SSC’s approval. At least seven (07) days prior to the date of conducting trading in treasury stocks, listed or registered organizations must publish information on trading in treasury stocks, trading time and principles for price determination in trading in treasury stocks. Within fifteen (15) as of the date on which approval on trading in treasury stocks is granted by the SSC, such trading in treasury stocks must be conducted. Period for conducting trading in treasury stocks shall be from ten (10) to thirty (30) days, except for trading conducted upon agreement method.

3. It’s prohibited that organizations listed or registered on the SE publish information on repurchase or sales of treasury stocks but do not conduct published trading and do not place trading orders within registered period for trading in treasury stocks; or place trading orders with the price beyond the price fluctuation limit within registered trading period. Listed or registered organizations are not allowed to particularly publish estimated trading price, they only publish the principle for determination of trading price which has been approved by the general meeting of shareholders (if any).

4. Within each trading date, organizations that have been listed or registered for training in treasury stocks upon order matching methods shall only place trading orders with the price defined in the principle stated in Clause 5 of this Article and trading volume from 3% to 10% of trading volume registered with the SSC. Listed or registered organizations shall apply this regulation until they complete trading in treasury stocks with trading volume registered with the SSC.

5. Principle for determining price for repurchasing or selling treasury stocks on the trading system upon order matching methods or agreement method of listed organizations is as follows:

Repurchase price ≤ preference price + (preference price *50% of price fluctuation limit of stocks)

Sell price ≥ preference price - (preference price *50% of price fluctuation limit of stocks)

6. Other than the cases stated in Clause 4, 5 of this Article, if the listed or registered organizations conduct any other trading in treasury stocks, the written approval from the SSC is required.

7. Listed or registered organizations are entitled to repurchase odd-block stocks to use as treasury stocks and immediately sell such treasury stocks after the repurchase. Repurchase of odd-block stocks of listed or registered organizations is executed through the brokerage of securities company or via trading system of the SE and via the VSD’s ownership transfer system.

8. Listed or registered organization can repurchase stocks of its employees according to the employees’ selection program in the company. Listed organization that is a securities company can purchase its own odd-block stocks at the request of customers or purchase its own odd-block stocks to correct trading errors executed through the VSD.

9. In case treasury stocks are sold under public or private offering, the law on public offering or private offering of stocks shall apply.

Article 9. Margin trading

1. Only securities company that has at least two professional skills for brokerage and self-trading in securities is entitled to conduct margin trading if:

a) The securities company is not under warning on working capital ratio as regulated by the law on securities with respect to financial safety, termination or suspension of operations, consolidation, merging, dissolution or bankruptcy; has not incurred losses more than or equal to 50% of charter capital which has been calculated according to audited financial statement of latest year and controlled latest half-year financial statements (if any). The auditor’s opinion on financial statement of latest year must be absolute approval.

b) Owner’s equity shall not lower than legal capital. The security company must fulfill requirements on percentage of liabilities on the owner’s equity, set up sufficient provisions and comply with other relevant regulations of the law on securities.

2. The SSC shall provide the securities company with guidance on reports before margin trading is provided. Within seven (07) days as of receiving date of reports of securities company, the SSC shall send an official dispatch to the securities company and publish the information on the SSC’s website confirming the securities company’s registration for providing margin trading. The securities company can provide margin trading as of the time when confirmation of registration is published on the SSC’s website.

3. Before the investor conducts margin trading, he must enter into a contract for opening margin trading account with securities company where the investor’s securities trading account is opened. Contract for opening margin trading account is also credit contract for loans on margin trading account. Contract for opening margin trading account must include contents on deposited assets (margins), period for additional margin, taking actions against margins when the customer fails in making additional margins; methods for settling disputes.

4. Foreign investor is not eligible for conducting margin trading.

5. The investor is allowed to open the only one (01) margin trading account at each securities company where the investor's securities trading account is opened. Margin trading account is separate account or shall be recorded as sub-item of the investor's existing trading account. The securities company must record the investor's margin trading account separately from that investor's trading account and separately from margin trading account and trading account of other investors.

6. Securities in margin trading are stocks or fund certificates that have been listed or registered on the SE and fulfilled requirements on listed or registered period; capital scale and operating results of the issuer; liquidity and price fluctuation (if any); transparence of information and other criteria as regulated by the SSC. On the basis of criteria regulated by the SSC, the SE shall publish the list of securities for margin trading or list of securities being prohibited from margin trading.

7. The SE shall publish on its website the list of securities that the company provides margin trading services, loan interest rate, and collateral for loans, initial margin rate and maintenance margin rate. In which, securities that are not allowed for conducting margin trading shall not be used as collateral when determining initial margin rate and maintenance margin rate.

8. The investor is obliged to ensure initial margin rate, maintenance margin rate and make additional margin as requested by securities company. In case of failure, securities company is entitled to release and sell margins according to provisions stated in the contract for opening margin trading account. Before the order on releasing and selling margins is performed, securities company must publish information as regulated by the law on securities regarding information publishing and inform customer of such order for carrying obligations of ownership reports and publishing trading information in accordance with relevant laws (if any).

9. Securities company that fails to fulfill any or a certain criteria as regulated in Clause 1 of this Article must immediately stop signing new contracts for opening margin trading accounts, stop providing loans for conducting margin trading and submit reports to the SSC within 48 hours since the aforesaid event occurred.

Securities company can continue to sign new contracts for opening margin trading accounts and provide loans for conducting margin trading after it has received notice from the SSC on the basis of providing sufficient documents proving its fulfillment of criteria regulated in Clause 1 of this Article.

10. The SSC shall, upon the approval of the Minister of Finance, promulgate regulations on guidelines for margin trading activities.

11. In case of need for market stabilization, the SSC is entitled to request securities company to suspend margin trading.

Article 10. Day trading

1. Securities companies that have sufficient securities trading operations and have fulfilled all requirements stated in Clause 1 Article 9 of this Circular are eligible for providing day trading services to customers after they have submitted reports to the SSC.

2. The SSC shall provide the securities company with guidance on reports before day trading services are provided. Within seven (07) days as of receiving date of reports of securities company, the SSC shall send an official dispatch to the securities company and publish the information on the SSC’s website certifying the securities company’s registration for providing day trading services. The securities company can provide day trading services as of the time when confirmation of registration is published on the SSC’s website.

3. Investor can conduct day trading after he has entered into day-trading contract and margin trading contract with securities company. Day-trading contract must include provisions allowing securities company to carry out loan and buy-in transactions for supporting settlement in case of deficiency of securities for transfer. Day-trading contract must clearly specify risks, damages and expenses that may be incurred by customer.

4. Day trading must comply with the following principles:

a) Day trading account is separate account or may be recorded as sub-item of the customer's existing trading account;

b) Investor is not allowed to conduct day trading activities for odd-block trading or trading under agreement method and the investor must comply with Article 4, Article 7 of this Circular;

c) Securities company is entitled to select types of securities in the list of listed securities eligible for margin trading to provide day trading services to customers. Securities company must publish on its website the list of securities whose day trading services shall be provided.

d) Investor shall place trading orders and ensure that total number of a type of securities in sell orders must be equal to total number of such type of securities in buy orders within a trading date and vice versa. In case total number of securities of conducted sell orders exceeds total number of securities of conducted buy orders, securities company shall comply with processes of settlement support as regulated in Article 11 of this Circular;

dd) In case sell orders has been placed by investor before he places buy orders or total trading volume of sell orders exceeds total trading volume of previously placed buy orders, securities company must refuse to conduct trading orders because it cannot ensure to have sufficient securities for transfer in settlement date;

e) Securities company shall take actions and execute obligations of paying money or transferring securities on behalf of the investor if that investor does not have enough money or securities for transfer in settlement date;

g) Customer shall compensate for damages and make payments to securities company for any arisen expenses relating to buy-in activities, securities loan or cash loan for settlement support in the event that such customer does not have enough money or securities for transfer in settlement date in accordance with relevant laws;

h) Securities company is entitled to request customer to provide margins in cashes or securities before allowing such customer to conduct day trading;

i) Within a trading date, total value of day trading (which is determined on the basis of total value of conducted buy orders and total value of conducted sell orders) at each securities company shall not exceed a given percentage compared with owner’s equity of company; and shall not exceed a given percentage compared with average trading value per day of previous month of such securities company. The number of securities for day trading at each securities company shall not exceed a given percentage compared with the number of circulating securities.

Aforesaid percentages shall comply with SSC’s regulations.

5. Day-trading activities and securities loan activities for settlement support shall be not conducted within five (05) days prior to the final registration date for closing shareholder rights over such securities.

6. In case of need for market stabilization, the SSC can request the securities company to suspend day-trading activities.

7. Securities company that fails to fulfill any or a certain criteria as regulated in Clause 1 of this Article must immediately stop signing new day-trading contracts, stop allowing investors to conduct day-trading activities and submit reports to the SSC within 48 hours since the aforesaid event occurred.

Securities company can continue to provide day-trading activities after it has received notice from the SSC on the basis of providing sufficient documents proving its fulfillment of criteria regulated in Clause 1 of this Article.

8. The SSC shall, upon the approval of the Minister of Finance, establish and promulgate regulations on guidelines for day-trading activities. The VSD shall, upon the SSC’s approval, promulgate regulations on guidelines for settlement of day trading.

Article 11. Provisions on settlement support for day trading

1. In case the investor does not have enough securities for transfer, securities company shall execute settlement obligations on behalf of that investor. Securities company is entitled to use source of securities from its self-trading account (if any) or borrow securities for transfer according to settlement support policies of the VSD.

2. Securities company must conduct buy-in transactions to refund to the number of securities that the company used for settlement support as regulated in Clause 1 of this Article.

3. Securities loan transactions and buy-in transactions for settlement support as stated in Clause 1, Clause 2 of this Article must be directly conducted by securities in the following principles:

a) Securities company shall conduct buy-in transactions on the trading system of the SE or upon other methods in consistent with the law on securities. In case trading orders are placed through the trading system, buy-in trading orders must be placed at ceiling price. In case trading is conducted upon agreement method, it must comply with relevant laws;

b) Securities company must carry out buy-in or loan transactions on its self-trading account;

c) Securities company must refund securities immediately when it acquires securities from buy-in and loan transactions.

4. In case the investor is incapable for making settlement for purchased securities that are not sold out in time (applicable to day trading), securities company shall use its capital and assets for fulfilling settlement obligations for customer’s trading.

5. The investor must make additional margins and pay any arisen expenses to securities company according to the signed contract.

Article 12. Market-making transactions

1. Securities companies that have fulfilled all requirements stated in Clause 1 Article 10 of this Circular are eligible for registering as market makers at the SE on the basis of market-making contracts signed with the issuers.

2. Supervisory banks, securities companies that are members establishing funds and securities companies that have fulfilled all requirements stated in Clause 1 of this Article are eligible for registering as ETF market makers on the basis of contracts signed with the asset management companies.

3. Market-making activities must comply with the following principles:

a) Market maker must honestly perform market-making functions with goodwill for the purpose of ensuring effective and stable operations of markets;

b) Depending on market conditions, market maker must maintain two-way quote or can display one-way quote for type of securities that he has registered as a market maker in accordance with the regulations of the SE. In case a type of securities needs liquidity, market-making period, quote methods, limit of difference between the bid price and the asked price, price rate-of-change, maintenance period of quote and cases in which trading is suspended shall apply regulations of the SE and market-making contract;

c) Market maker shall only place limit orders for market-making trading. Market maker can simultaneously conduct market-making trading and self-trading provided that price principle must be ensured as stated in the regulations of the SE.

4. The SE shall, upon the SSC’s approval, establish and promulgate regulations on guidelines for market-making activities.

5. The SE is entitled to terminate contract signed with market maker or suspend market-making activities for any or a certain types of securities if such market maker fails to fulfill regulated obligations and violates other provisions of the signed contract in accordance with the SE’s regulations.

Article 13. Report and supervision policies

1. The SE and VSD shall submit reports on securities trading situation to the SSC in accordance with the law.

2. The SE and VSD shall bear the supervision of the SSC with respect to securities trading.

3. Securities companies shall submit periodical or unscheduled reports on margin trading and day trading activities to the SSC, the SE (if any) and the VSD (if any) as regulated by the SSC.

4. The SE and VSD shall coordinate with each other to follow trading orders relating to margin trading and day trading. Securities companies and depository banks (if any) shall coordinate with each other, inspect and ensure the validity of trading orders relating to margin trading and day trading and ensure settlement obligations.

Chapter III

IMPLEMENTATION ORGANIZATION

Article 14. Implementation provision

1. This Circular takes effect as of July 01, 2016 and supersedes the Circular No. 74/2011/TT-BTC dated June 01, 2011 of the Minister of Finance providing guidance on securities trading.

2. The SE, VSD, depository members and securities companies shall establish IT systems and facilities, regulations and professional processes. On the basis of finished IT systems and facilities, the SE and VSD shall, upon the SSC's approval, promulgate regulations on guidelines for trading activities as prescribed in this Circular.

3. The SSC shall submit reports to the Ministry of Finance before the promulgation of regulations on guidelines for trading activities as prescribed in this Circular.

Article 15. Implementation organization

1. The SSC, SEs, VSD, securities companies, asset management companies, and other relevant organizations and individuals shall implement this Circular.

2. Any amendments to this Circular shall be subject to the Minister of Finance’s decision.