Quyết định 31/1999/QĐ-UBCK6

Document Content body { font-family: Arial, sans-serif; margin: 20px; line-height: 1.6; } p { margin: 10px 0; } DECISION No DECISION No. 31/1999/QD-UBCK6 OF OCTOBER 12, 1999 PROMULGATING THE REGULATION ON SUPERVISION AND INSPECTION OF SECURITIES ACTIVITIES AND SECURITIES MARKET THE CHAIRMAN OF THE STATE SECURITIES COMMISSION Pursuant to the April 1 st , 1990 Ordinance on Inspection; Pursuant to the Government�s Decree No. 15/CP of March 2, 1993 on the tasks, powers and the State management responsibilities of the ministries and ministerial-level agencies; Pursuant to the Government�s Decree No. 75/CP of November 28, 1996 on the establishment of the State Securities Commission; Pursuant to the Government�s Decree No. 48/1998/ND-CP of July 11, 1998 on securities and securities market; Pursuant to the Government�s Decree No. 61/1998/ND-CP of August 15, 1998 on the inspection and examination of enterprises; At the proposal of the Chief Inspector of the State Securities Commission, DECIDES: Article 1.- To promulgate together with this Decision the "Regulation on supervision and inspection of securities activities and securities market". Article 2.- This Decision takes effect 15 days after its signing. Article 3.- The Office Director, the Chief Inspector and the heads of the units attached to the State Securities Commission, the securities trading centers, organizations and individuals involved in securities activities and securities market shall have to implement this Decision. Chairman of the State Securities Commission LE VAN CHAU REGULATION ON THE SUPERVISION AND INSPECTION OF SECURITIES ACTIVITIES AND SECURITIES MARKET (Promulgated together with Decision No. 31/1999/QD-UBCK6 of October 12, 1999 of the Chairman of the State Securities Commission) Chapter I GENERAL PROVISIONS Article 1.- This Regulation prescribes the principles, objects, contents, methods and procedures for conducting supervision and inspection of securities activities and securities market. The supervision and inspection of securities activities and securities market aim to make the securities market�s activities stable, fair, transparent and efficient, to protect the interests of the State as well as the legitimate rights and interests of investors. Article 2.- 1. Supervision and inspection objects include: a) Issuing organizations that have their securities traded at the central trading market; b) Securities trading centers; c) Securities firms, securities investment funds, investment fund management companies, securities custody members, supervisory banks; d) Securities business practitioners; e) Organizations and individuals involved in securities activities and securities market; 2. Supervision and inspection scope covers: a) Securities issuing activities; b) Securities transactions; c) Securities trading, registration, clearing payment and custody activities; d) Information disclosure. Article 3.- The supervision and inspection responsibilities: 1. The State Securities Commission�s Inspectorate is a unit in the organizational structure of the State Securities Commission and has the function of inspecting and supervising the observance of the policies and laws, as well as operations of the securities trading centers, organizations and individuals involved in the securities issuance, trading and services. 2. Within the ambit of their respective functions and tasks, the functional departments under the State Securities Commission shall have to supervise the securities issuing, business and trading organizations, as well as individuals engaged in securities activities according to the provisions of law. 3. The securities trading centers have the responsibility and power to organize the supervision and inspection of securities trading activities at their places. 4. Organizations trading in securities or providing securities services shall have to regularly inspect and supervise by themselves their own observance of law in their business activities. Chapter II SUPERVISION ACTIVITIES Article 4.- Supervision activities must be based on concrete operations and reported data and documents to analyze and compare them with standards and requirements stated in the legal documents on securities and securities members, with a view to detecting early the signs of shortcomings or violations committed by securities-issuing, -business and -trading organizations as well as individuals engaged in securities activities. The functional departments under the State Securities Commission, the State Securities Commission�s Inspectorate and the securities trading centers shall have to organize the supervision activities in a regular and effective manner. Article 5.- The supervision of securities issuance, listing and information disclosure shall be conducted as follows: 1. Analysis of factors included in securities issuing dossiers and securities listing dossiers; 2. Supervision and analysis of the observance of information disclosure requirements; 3. Analysis of the saleability of shares and bonds; 4. Analysis of the capability for paying principal and interest of bonds and dividends; 5. Analysis of occurrences that cause serious damage, such as: cessation of the entire production or some principal operations; changes in business purposes; split or merger of companies... that affect the prices of such companies� currently circulated shares and/or bonds. 6. Evaluation of trends of issued and listed securities. Article 6.- The supervision of trading activities at the securities trading centers shall cover the following contents: 1. Analysis of each specific securities purchase or sale activity and the fluctuation of prices and trading volume in order to detect abnormal trading activities; 2. Organization of inspections in order to detect inside transactions or price- or market-manipulating transactions; 3. Control of the ownership status of domestic and foreign investors; 4. Verification of rumors that may affect the market prices; 5. Evaluation of market development trends. Article 7.- The supervision of financial capability and operations of securities business and/or service organizations shall cover the following contents: 1. The maintenance of liquidity capital and liquid assets; 2. Quality of assets; 3. Business results; 4. Actually available capital; 5. Obligations toward the State budget; 6. Appraisal of results of securities business and/or service organizations� management and administration; 7. Supervision of the meeting of the prescribed conditions when the operation licenses are granted. Chapter III INSPECTION ACTIVITIES Article 8.- The State Securities Commission�s functional departments and the securities trading centers shall base themselves on the result of supervision activities to promptly report the signs of shortcomings or violations to the State Securities Commission�s Inspectorate upon detecting them. Annually, the State Securities Commission�s Inspectorate shall conduct regular inspections and irregular inspections, depending on the nature of operations of organizations and/or individuals subject to inspection or the nature and seriousness of detected shortcomings and violations that must be inspected. Article 9.- The inspection of an issuing organization must be focused on suspect points or errors in the securities-issuing and-listing activities and information disclosure, including: a) The accuracy, completeness and validity of issuing dossiers and listing dossiers; b) The accuracy, completeness and promptness of information disclosing documents; c) Mortgaged assets (if any) or issuance underwriting; d) The observance of security rates as prescribed; e) The deduction for setting up of funds for repayment of bond principal and interest; f) Damage caused by unexpected incidents and the remedial capability. Article 10.- For the inspection of trading activities at the securities trading centers, the special attention must be paid to the determination of time selected as the inspection basis, counting from the date the prices and trading volume exceed the prescribed limits (for cases of suspect market manipulating transactions) or price and trading volume fluctuation before the information disclosure (for cases of suspect inside transactions), including: a) Volume of securities issued to the public; b) Indexes of prices and trading volume for securities under suspicion; c) Data and documents of brokerage companies and major investors taking part in trading activities; d) Determination of causes of the changes in daily price and trading volume; e) Analysis of relations and information: - Relations between those who know the issuing organizations� internal information and centralized investors; - Relations among major investors in terms of accounts, prices and/or trading volume; - Acts of centralized purchase or sale in large volumes and sweeping transactions; - Transactions with signs of violating prohibitions or restrictions. Article 11.- The inspection of financial capability and operations of securities business and service organizations shall include the following principal contents: 1. Inspection of the nature of securities activities: - Observance of the regime of opening and managing securities trading accounts of clients; - Standardization of brokerage and dealing operations; - Obligation to firmly grasp information on clients; - Observance of the rules set for brokerage and dealing operations. 2. Inspection of unfair acts: - Collecting fees and/or charges from clients beyond the prescribed rates; - Failing to adequately and promptly send notices confirming the transaction results to clients; - Acts of compelling clients into securities transactions; - Pressuring, mobilizing or inciting clients to speculate in securities. 3. Inspection of financial capability: - Proportion of net liquidity capital at the time of inspection, as compared with the previous periods; - Rates of capital investment, as compared with the prescribed limits; - Quality of dealing securities investment; - Sources of incomes from securities trading, brokerage, dealing and issuance underwriting; - Fulfillment of obligations toward the State and shareholders. 4. Inspection of accounting work: - Opening of accounting and recording books, keeping of vouchers and accounting books; - Validity and legality of accounting activities and accounting vouchers; - Accounting accuracy, completeness, promptness and balance. 5. Inspection of internal control work: - Performance of the inspected companies� internal control work; - Quality and effectiveness of the internal control work; - Cooperation relationship between the internal control and external audit as well as the agency(ies) in charge of State management over securities. Article 12.- The inspection of bodies and units under the State Securities Commission shall comply with contents stated in inspection decisions issued by the Chairman of the State Securities Commission. The main inspection contents shall include: a) The quality of internal inspection and control in the inspected units according to the regulations; b) The observance of regulations, and the handling of problems, complaints and denunciations; c) Other contents as requested by the Chairman of the State Securities Commission. Article 13.- 1. The Chairman of the State Securities Commission and the Chief Inspector of the State Securities Commission may issue decisions on inspection of organizations and individuals involved in the securities issuance, trading and transactions. 2. The directors of the securities trading centers may issue decisions on inspection of securities trading activities at their respective securities trading centers. 3. The inspection and examination decisions must clearly state the legal grounds, contents, requirements, scope and duration of inspection and examination, as well as the powers and responsibilities of the inspection teams. 4. The target organizations must be notified of the inspection or examination at least 7 days before the inspection or examination decisions are announced, except for cases of irregular inspections or examination. 5. The inspection duration: a) The inspection duration must not exceed 30 days; b) When necessary, the person who has issued the inspection decision may extend the inspection duration, but the extension must not exceed 30 days; c) The inspection duration shall be counted from the date the inspection decision is announced at the inspected organization to the date the draft report on inspection result is made public. 6. The examination duration: a) The examination duration shall not exceed 5 days after the examination decision is announced; b) In special cases, the person who has issued the examination decision may extend the examination duration, but the extension must not exceed the duration prescribed for each examination. Chapter III REPORTING REGIME Article 14.- Organizations engaged in securities issuance, business and trading, and individuals engaged in securities activities, that are subject to the supervision and inspection by the State Securities Commission, shall have to fully provide the Securities Commission�s Inspectorate, the functional departments of the State Securities Commission and the securities trading centers with information and reports in service of the inspection and supervision work, while ensuring the accuracy, timelines and confidentiality of such information and reports as prescribed in the Regulation on information and reports. Article 15.- Quarterly and annually, the functional departments of the State Securities Commission, the securities trading centers, securities firms, investment fund management companies,... shall have to send to the State Securities Commission�s Inspectorate reports on results of their internal supervision, examination and control works, as well as the consideration and handling of complaints and denunciations. Monthly, the State Securities Commission�s Inspectorate shall have to send reports on the direction and performance of supervision and inspection activities to the Chairman of the State Securities Commission; and quarterly and annually, send reports on supervision and inspection results, and on the consideration and handling of complaints and denunciations to the Chairman of the State Securities Commission and the State Inspector General. Chapter IV COMMENDATIONS, REWARDS AND SANCTIONS Article 16.- Officials, employees, collaborators, inspection organizations and inspectors who have recorded achievements in the supervision, inspection and examination activities shall be commended and/or rewarded according to the State�s regulations. Article 17.- Persons who, for their own benefits or personal motivations, abuse their positions and powers for supervision and inspection of securities activities and securities market, infringe upon the legitimate interests of the inspected or supervised organizations and/or individuals; persons who obstruct, buy off or retaliate inspectors and inspection organizations� collaborators or violate other regulations on supervision and inspection of securities activities and securities market, shall, depending on the nature and seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability as prescribed by law. Chapter V IMPLEMENTATION PROVISIONS Article 18.- 1. The Chief Inspector of the State Securities Commission shall have to guide the implementation of this Regulation. 2. The amendments and supplements to this Regulation shall be decided by the Chairman of the State Securities Commission. Chairman of the State Securities Commission LE VAN CHAU