Many new acts are added to the penalty framework
The Ministry of Finance and the State Securities Commission (SSC) are seeking opinions on the draft Decree amending and supplementing a number of articles of Decree No. 156/2020/ND-CP, Decree No. 128/2021/ND-CP and Decree No. 158/2020/ND-CP. This draft aims to update regulations according to the latest Securities Law (Law No. 56/2024/QH15), while adjusting sanctions to ensure deterrence and better suitability with management practices.
According to the draft, a series of violations will be added to the penalty framework such as: violations of public corporate governance, failure to update information on the operating license adjustment to the business registration system, or securities companies not complying with responsibilities when providing services. In particular, new regulations requiring businesses to publish information in English according to Circular 68/2024/TT-BTC will also come with fines for violations, in order to meet the standards for transparent disclosure and access to foreign investors.
The draft also amends the arrangement of violations, clarifying concepts, terms, and principles for determining fines for repeated violations. Some groups of behaviors will be gathered in essence, although there are different penalty levels due to the level of violation such as violations of reporting deadlines, information disclosure, or bond trading registration.
Increasing sanctions for behavior that risks affecting investors
The draft shows a tighter trend towards behaviors that pose a great risk of affecting investors' rights or posing systemic risks to the stock market. The fine will be significantly increased for violations of individual sales, deposit trading, or violations by securities practitioners.
For example, borrowing securities accounts leading to manipulation and failure to report stock transactions of large shareholders or related parties with a value of VND10 billion or more will result in temporary suspension of transactions to the maximum level according to the administrative penalty framework. In addition, the draft adds a form of suspension of securities brokerage activities for a certain period of time for individuals or organizations that abuse customer assets, such as lending money, mortgaging investors' securities or performing services not licensed by the State Securities Commission.
This tightening is considered necessary in the context that the market has witnessed a number of major violations that seriously affected investor confidence, increased market volatility and negatively affected the transparent image of the Vietnamese financial market.
Separately violating corporate bonds
Another major change in the draft is to separate violations related to individual corporate bonds into an independent section. This is to reflect the characteristics of individual bonds, which have different regulations compared to stocks or securities offered for sale to the public. Violations such as violations in selling activities, failure to disclose complete information, failure to register for transactions, or providing services related to bonds when not qualified will be sanctioned more clearly.
The draft also adjusts regulations on money laundering prevention and combating terrorism in Article 45 of Decree 156, following instructions to the Decree on penalties in the field of currency and banking. This helps ensure consistency in the application of the law, especially when the Law on Prevention of Money Laundering and the Law on Prevention of Tourism have both been amended recently.
To comply with the 2023 Law on Identification and implement Project 06 of the Government, the draft also proposes to replace personal information in administrative records - from "identity card, citizen identification card" to "individual identification number". This is expected to help simplify administrative procedures and reduce technical barriers in the process of processing documents.
