Amendment of the Law on Securities: Putting inspection and supervision into effect

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The draft Law also increased the maximum fine in sanctioning administrative violations of 3 billion vnd for organizations and 1.5 billion vnd for individuals. Photo: Internet

Increase authority and fine levels

According to the State Securities Commission, over the past time, though the authorities have continuously detected and sanctioned violations in the stock market, the inspection and sanctioning violations on the stock market has not been as expected, in which the reason is that the authority of the management agency is not good enough. As a result, the draft Law on Securities (amended) has increased authority to the SSC, as well as increased sanctions compared to current regulations.

According to Ms. Vu Thi Chan Phuong, Vice Chairman of the SSC, this draft stipulates that the SSC has the right to request agencies, organizations and individuals having information, documents and data related to inspection and examination contents, to provide such information, documents or data, or request the organization or individual to explain and confront the contents related to the inspection or examination.

At the same time, the SSC may request credit institutions and branches of foreign banks in Vietnam to provide information relating to transactions on their accounts, as well as to request telecommunication enterprises to provide names, addresses, telephone numbers, dialed numbers and call time, for verification and handling of prohibited acts. In monitoring, detecting and dealing with cross-border securities issues related to the Vietnam stock market, the SSC will coordinate in inspection, investigation, information collection and sharing with the managing authorities of the stock market.

In addition, representatives of the SSC also said that, one of the notable points of the draft Law on Securities (amended) is that the securities companies have the obligation to supervise securities transactions. Accordingly, the securities companies will be the third line of supervision of trading activities in the market, supporting the two existing monitoring lines - the Stock Exchange and the SSC.

In addition, the draft law also increased the fine in sanctioning administrative violations of maximum 3 billion vnd for organizations and 1.5 billion vnd for individuals. More specifically, the maximum fine in the case of recidivism is double the maximum fine in the case when a first-time offense has occurred, and the offending organization or individual is also subject to one or more of the other handling measures.

According to Mr. Nguyen Thanh Ky, General Secretary of the Vietnam Association of Securities Business, the increase of some authorities to the State Securities Commission of Vietnam, such as the authority to request information from credit institutions, telecommunication enterprises and related organizations and individuals, is in order to create better conditions for the SSC Inspectorate to use its powers in handling violations in the market, helping the market to operate more transparently.

Besides, the separation of operation license with the business registration certificate of the securities company is also a remarkable new regulation. This helps the State Securities Commission to enforce sanctions such as: suspension of operation, deprivation of license, revocation of licenses, etc…, avoiding the situation of not completely resolved violations due to procedures related to dissolution and bankruptcy of enterprises, help purify the market participants.

Improve management

Commenting on the inspection and supervision regulations of the current regulator, Mr. Can Van Luc, a finance and banking expert, said that the inspection and supervision process of the SSC still has a delay due to this unit having not been given full authority. Therefore, Dr. Can Van Luc proposed to raise the scope and assign real rights to the SSC to ensure strong and sustainable development in the context of the market has developed very quickly.

Mr. Luc took an example of the violation of information disclosure of enterprises that needs the implementation of administrative punishment as quickly as possible. If it waits for the action from the investigators, the time will be extended, the penalty will be reduced.

“The right of first access to information should be given to a specialized agency - the SSC, and if the law has been broken and needs the investigative body, this is a later story. I think that it is feasible and appropriate to give more authority to SSC,” said Dr. Can Van Luc.

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On the same point, Dr. Vu Bang, former Chairman of the SSC, Member of the Economic Advisory Team of the Prime Minister, said that the regulations on the authority of the State Securities Commission for inspections and sanctions was strictly regulated, more positive. According to Dr. Vu Bang, the draft has very good reforms, when adopted, it will help the market to operate more transparently, protect investors better and thereby help mobilize capital from the international market.

Mr. Nguyen Thanh Ky also said that the regulations on increasing supervision and inspection authority for the SSC will create transparency and honesty in the market, and the market supervision of the authorities is also more sensitive. However, representatives of the Vietnam Association of Securities Business said that the draft should further highlight the authority of the SSC because it is very important to make Vietnam's regulations meet the international standards.