Conditions for establishing a securities company

Create at: 27/05/2022 16:11

1. What is a securities company?

🔰 Securities company is an organization operating with legal status and license to do business. The securities trading license is issued by the State Securities Commission.

🔰 Securities companies are allowed to operate under the control of the Law on Securities and a number of other provisions of law. Securities companies can operate in the form of joint stock companies or limited liability companies.

🔰 Securities trading activities can be some or all of the following activities:

✔ Stock brokerage.

✔ Stock trading.

✔ Underwriting of securities issuance.

✔ Securities investment consulting.

2. Conditions for establishing a securities company:

2.1. Conditions of office

◾ The securities company has a working office and facilities for securities business activities under the guidance of the State Securities Commission after it is approved by the Ministry of Finance.

2.2. Capital conditions:

◾ A securities company must have a charter capital which is actually contributed capital, at least equal to the legal capital level as prescribed by law.

◾ The contributed capital at the time of the establishment of the company is at least equal to the legal capital as prescribed for each operation as follows:

Major	Minimum capital level
Stockbroker	25 billion VND
Securities trading	100 billion VND
Underwriting securities	165 billion VND
Securities investment consulting	10 billion VND

2.3. Personnel conditions:

◾ The director (General Director) of a securities company must satisfy the following regulations:

➥ Not being examined for penal liability or serving a prison sentence or banned from securities practice;

➥ At least 02 years of experience working in the professional department of organizations in the fields of finance, securities, banking, and insurance, or in the finance, accounting, and investment departments in other enterprises. ;

➥ Having a practicing certificate of financial analysis or practicing certificate of fund management;

➥ Not be sanctioned for administrative violations in the field of securities and securities market within the last 6 months up to the time of application submission.

◾ There are at least three (03) securities practitioners for each business operation applying for an operating license.

2.4. Conditions on the structure of shareholders and capital contributors:

⏩ A securities company established in the form of a joint stock company or a limited liability company with two or more members must have at least two (02) founding shareholders, and the founding member is an organization satisfying the provisions of Clause 7 of this Article, of which there must be at least one (01) organization being a commercial bank, insurance enterprise or a foreign organization as prescribed in Clause 8 of this Article.

⏩ A securities company established in the form of a one-member limited liability company, the owner must be a commercial bank, an insurance enterprise as prescribed in Clause 7 of this Article, or a foreign organization as prescribed in Clause 8 of this Article;

⏩ The rate of ownership of shares and capital contributions of founding shareholders and founding members being organizations is at least 65% of the charter capital, of which the organizations are commercial banks, an insurance enterprise, or a foreign organization specified in Clause 8 of this Article owning at least 30% of the charter capital of the securities company;

⏩ Shareholders or members owning 10% or more of the share capital or contributed capital of a securities company and related persons of such shareholder or capital contributor may not contribute more than 5% of the shares or capital contribution of another securities company;

⏩ Securities companies established and operating in Vietnam may not contribute capital to establish other securities companies in Vietnam.

2.5. Conditions for individuals to contribute capital:

🔗 Being an individual who is not eligible for the establishment and management of an enterprise in Vietnam in accordance with the law and has sufficient financial capacity to contribute capital to establish a securities company;

🔗 Only use their own capital to contribute capital, loans cannot be used, investment trust capital of other organizations and individuals;

🔗 Individuals participating in capital contributions must prove their ability to contribute capital in Vietnamese Dong or freely convertible foreign currencies in their bank accounts. The minimum value of money must be equal to the expected capital contribution to the securities company and the time of confirmation by the bank must not exceed thirty (30) days from the date on which the application file for the establishment of the securities company is completed. sufficient and valid.

2.6. Conditions for organizations participating in capital contribution:

✨ Have legal status; is not in a state of consolidation, merger, division, separation, dissolution, or bankruptcy, and is not in the circumstances where he is not entitled to establish and manage an enterprise in accordance with the law;

✨ Business activities must be profitable for two (02) consecutive years before the year of capital contribution to establish the securities company and have no accumulated losses up to the time of capital contribution to establish the securities company;

✨ In case of being a commercial bank, insurance enterprise, or securities company contributing capital:

➥ Not under operational control, special control, or other warning conditions;

➥ Satisfy all conditions to participate in capital contribution and investment in accordance with specialized laws.

✨ In case other economic organizations contribute capital:

➥ Having operated for at least five (05) consecutive years preceding the year of contributing capital to establish a securities trading organization;

➥ Equity after deducting long-term assets is at least equal to the expected capital contribution;

➥ Working capital must be at least equal to the expected capital contribution.

✨ Only use equity and other valid capital sources in accordance with specialized laws, and cannot use entrusted capital of other organizations and individuals to contribute capital.

3. Procedures for establishing a securities company

👉 Step 1: Advise business people on the regulations on setting up a company

👉 Step 2: Prepare documents and give them to business people to sign.

👉 Step 3: TASCO will submit the application on your behalf and receive the results.

👉 Step 4: Hand over the registration certificate to entrepreneurs.

👉 Step 5: Post-establishment consultation.

➤ Dossier to establish a securities company includes:

● Charter of the company;

● An application for establishment registration;

● List of founding shareholders or capital contributors (depending on the type);

● Authorization letter (if the legal representative does not directly submit the application);

● Notarized copy of ID card/Citizen ID/passport of shareholders/members, legal representatives, and representatives submitting documents.