Nghị định 59/2021/ND-CP

DECREE

PRESCRIBING FINANCIAL MANAGEMENT AND PERFORMANCE ASSESSMENT OF VIETNAM EXCHANGE AND VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION

Pursuant to the Law on Organization of Government dated June 19, 2015;

Pursuant to the Law on Amendments to the Law on Government Organization and the Law on Local Government Organization dated November 22, 2019;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Law on management and use of state capital invested in manufacturing and business operations of enterprises dated November 26, 2014;

Pursuant to the Law on Securities dated November 26, 2019;

At the request of the Minister of Finance;

The Government promulgates a Decree prescribing financial management and performance assessment of Vietnam Exchange and Vietnam Securities Depository And Clearing Corporation.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Decree deals with the mechanism for financial management and performance assessment of Vietnam Exchange and Vietnam Securities Depository And Clearing Corporation.

2. In addition to regulations herein, Vietnam Exchange and Vietnam Securities Depository and Clearing Corporation shall carry out financial management and performance assessment in accordance with regulations of the Law on management and use of state capital invested in manufacturing and business operations of enterprises and its guiding, amending and superseding documents (if any).

Article 2. Regulated entities

1. Vietnam Exchange (VNX).

2. Vietnam Securities Depository and Clearing Corporation (VSDCC).

3. Ministry of Finance that is the owner’s representative agency in VNX and VSDCC.

4. Other organizations and individuals involved in the mechanism for financial management and performance assessment of VNX and VSDCC.

Chapter II

FINANCE OF VIETNAM EXCHANGE AND VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION

Article 3. Intercorporate investments

1. VNX and VSDCC shall only make intercorporate investments in the fields of securities and securities market.

2. Types and authority to decide to make intercorporate investments of VNX and VSDCC shall comply with regulations of the Law on management and use of state capital invested in manufacturing and business operations of enterprises and their Charters on organization and operation.

Article 4. Revenues

1. VNX shall manage its revenues and other incomes in accordance with Article 30 of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 prescribing state capital investments in enterprises, use and management of capital and assets in enterprises and its guiding, amending and superseding documents (if any). Revenues of VNX include:

a) Operating revenues, including revenues from management of members and those from other operations as prescribed by law;

b) Revenues from provision of services, including information services, technological infrastructure services for the securities market, and other services as prescribed by law;

c) Revenues and incomes from investments in its subsidiaries, including after-tax profits after setting aside funds as prescribed in subsidiaries, differences between the owner's equity and the charter capital of the subsidiary, financial incomes and other incomes as prescribed by law.

2. VSDCC shall manage its revenues and other incomes in accordance with Article 30 of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 prescribing state capital investments in enterprises, use and management of capital and assets in enterprises and its guiding, amending and superseding documents (if any). Revenues of VSDCC include:

a) Operating revenues, including revenues from management of members; registration of securities; depositing of securities; transfer of securities between trading accounts; provision of corporate action services; transfer of ownership of securities not through the trading system; provision of settlement agent services for government's debt instruments, government-backed bonds and municipal bonds; provision of clearing and settlement for securities transactions, management and transfer of positions between trading accounts, management of margins, post-transaction error rectification, delay of settlement dates, and change to cash payment; registration of collateral for securities registered at VSDCC and revenues from other operations as prescribed by law;

b) Revenues from provision of services, including information services and other services as prescribed by law;

c) In addition to financial incomes and other incomes as prescribed by the Law on management and use of state capital invested in manufacturing and business operations of enterprises, VSDCC is allowed to record interests on deposits earned from payment of dividends, principal and interest amounts of government’s debt instruments, government-backed bonds, municipal bonds and other securities, and exercise of call options for securities as its financial incomes.

Article 5. Expenses

1. VNX and VSDCC shall manage its expenses in accordance with Article 30 of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 prescribing state capital investments in enterprises, use and management of capital and assets in enterprises and its guiding, amending and superseding documents (if any).

2. When determining its taxable incomes, VSDCC may include the following expenses in its deductible expenses, including:

a) Contributions to the operational risk management fund as prescribed in Clause 3 Article 156 of the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020 on elaboration of some articles of the Law on Securities and its guiding, amending and superseding documents (if any). Contributions to the operational risk management fund shall be made quarterly. At the end of the fiscal year, the residual balance of the operational risk management fund shall be carried forward to the following year;

b) Revenues from transfer of ownership of securities not through the trading system transferred to subsidiaries of VNX.

Article 6. Performance assessment and ranking

1. The assessment of performance and ranking of VNX and VSDCC shall be carried out in accordance with law regulations on performance assessment and ranking of state-owned enterprises. 

2. When calculating performance assessment criteria, VNX and VSDCC shall, in addition to eliminated objective factors as prescribed by law regulations on performance assessment of state-owned enterprises, eliminate the following objective factors:

a) State policies that affect the listing and trading of securities as well as registration, depositing, clearing and settlement of securities transactions conducted on the securities market;

b) Changes in operating revenues and revenues and incomes from investments in subsidiaries of VNX due to: the quantity of listed and registered companies; volume of traded securities and trading prices; number of members of VNX; value of bid-winning bonds, plan and scale of raising capital by issuing bonds; value of traded bonds; value of securities whose ownership is transferred not through the trading system; trading volume of derivatives; trading volume of other securities as prescribed by the Law on Securities;

c) Changes in operating revenues of VSDCC due to: volume of securities deposited during the year; value of securities (initially) registered in the year and times of additional registration of securities; principal and interest amounts of government’s debt instruments, government-backed bonds and municipal bonds; times of performance of corporate actions and corresponding number of shareholders of each time; times of transfer of securities between accounts, and value of transferred securities; value of securities whose ownership is transferred not through the trading system; number of depository members and number of clearing members; number of contracts and values of securities borrowed/lent, balances of positions at the end of day; balances of margins at the end of day, trading value of novating securities and volume of novating derivatives; number of transactions with error rectification, number of transactions with delayed settlement date, and number of transactions with cash payment.

Article 7. Financial management, supervision and performance assessment of subsidiaries of VNX

1. Pursuant to regulations herein, regulations on financial management and performance assessment of state-owned enterprises, and relevant laws, VNX shall promulgate regulations on financial management, supervision and performance assessment of its subsidiaries.

2. Regulations on financial management of subsidiaries of VNX shall include:

a) Charter capital, capital mobilization and intercorporate investments;

b) Investment, construction and procurement of fixed assets, and asset management;

c) Revenues of the subsidiary of VNX, including:  operating revenues (revenues from listing and trading of securities, trading of derivatives, bidding for bonds, auction of securities, transfer of ownership of securities not through trading system and revenues from other operations); revenues from provision of services (including information services, technological infrastructure services for the securities market, and other services); financial incomes and other incomes.  The subsidiary of VNX is allowed to record interests on deposits relating to auction of securities as its financial incomes;

d) Expenses of the subsidiary of VNX;

dd) Distribution of profits after paying taxes and setting aside funds;

e) Other contents to serve management requirements.

3. Regulations on supervision and performance assessment of subsidiaries shall include:

a) Criteria and grounds for performance assessment and ranking of enterprises;

b) Methods for performance assessment and ranking of enterprises;

c) When calculating performance assessment criteria, the subsidiaries are allowed to eliminate the same objective factors as those for VNX as prescribed in Clause 2 Article 6 hereof;

d) Other contents as prescribed by law.

Chapter III

RESPONSIBILITIES OF RELEVANT AUTHORITIES

Article 8. Responsibilities of VNX and VSDCC

1. Comply with regulations on financial management and performance assessment laid down in the Law on management and use of state capital invested in manufacturing and business operations of enterprises and its guiding, amending or superseding documents (if any).

2. Bear the competent authorities’ supervision and inspection of financial works of VNX and VSDCC.

3. VNX shall promulgate regulations on financial management, supervision and performance assessment of its subsidiaries in accordance with regulations herein.

Article 9. Responsibilities of Ministry of Finance

1. Exercise and perform rights and responsibilities of the owner’s representative agency to VNX and VSDCC in accordance with the Law on management and use of state capital invested in manufacturing and business operations of enterprises, regulations herein and their guiding, amending and superseding documents (if any).

2. Carry out the assessment of compliance with policies which is used as the basis for requesting the Government to amend or supersede regulations on financial management and performance assessment of VNX and VSDCC.

Chapter IV

IMPLEMENTATION CLAUSE

Article 10. Effect

1. This Decree comes into force from August 06, 2021.

2. After VNX and VSDCC are established and start official operation according to the 2019 Law on Securities, their financial management and performance assessment shall be carried out in accordance with regulations herein; Articles 9, 10, 11, 12, Clause 3 Article 13 and the phrases “Sở Giao dịch chứng khoán, Trung tâm Lưu ký Chứng khoán Việt Nam” (“Stock Exchange, Vietnam Securities Depository”) and “Sở Giao dịch chứng khoán và Trung tâm Lưu ký Chứng khoán Việt Nam” (“Stock Exchange and Vietnam Securities Depository”) in Articles 1, 2, 13, 15, 16, 17 of the Government’s Decree No. 122/2017/ND-CP dated November 13, 2017 are abrogated.

Article 11. Transition

1. Stock Exchanges and Securities Depository Centers that are organized and operating under the Law on Securities No. 70/2006/QH11, as amended in the Law No. 62/2010/QH12, shall continue complying with regulations on financial management and performance assessment laid down in the Government’s Decree No. 122/2017/ND-CP dated November 13, 2017 until VNX and VSDCC starts their operation as prescribed in the Law on Securities No. 54/2019/QH14 dated November 26, 2019, except the provisions in Clause 3 of this Article.

2. Hanoi Stock Exchange (HNX) and Ho Chi Minh Stock Exchange (HSX) shall record balances of compensation funds for members as at December 31, 2020 as their other incomes and follow procedures for payment of corporate income tax on such incomes in accordance with regulations of law.

3. With regard to balances of operational risk management fund and fund for prevention of derivatives settlement risks of Vietnam Securities Depository:

a) Vietnam Securities Depository shall comply with Clause 15 Article 310 of the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020;

b) Before VSDCC starts to operate under regulations of the Law on Securities No. 54/2019/QH14, Vietnam Securities Depository shall include contributions made to the operational risk management fund, as prescribed in Point a Clause 2 Article 5 hereof, in its expenses when determining its taxable incomes.

Article 12. Responsibility for implementation

Minister of Finance, Boards of Members and General Directors of VNX and of VSDCC, and relevant organizations and individuals are responsible for the implementation of this Decree.