The condition for establishing a securities company is that all founding shareholders and contributing members capital must be an organization, right?

Which agency has the authority to issue the License for establishment and operation of securities business?

According to Article 70 of the Securities Law 2019, the authority to issue, re-issue, adjust and revoke the License for establishment and operation of securities Securities trading is regulated as follows:

The State Securities Commission has the authority to issue, re-issue, adjust and revoke licenses for establishment and securities business operations for securities companies, securities investment fund management companies, securities company branches and foreign fund management companies in Vietnam.

What are the conditions for a securities company to be granted a License to establish and operate securities business?

According to Article 74 of the Securities Law 2019, the conditions for granting a License to establish and operate securities business include:

– Capital conditions include: charter capital contribution to the securities company must be in Vietnam Dong; Minimum charter capital for each business operation of a securities company in Vietnam according to Government regulations.

– Conditions for shareholders and capital contributing members include:

+ Shareholders and capital contributing members are individuals who are not eligible to establish and manage enterprises in Vietnam according to the provisions of the Enterprise Law;

+ Shareholders and capital contributing members are organizations that must have legal status and be operating legally; Profitable business activities for 02 years immediately preceding the year of application for license; The most recent year’s financial statements must be audited with an unqualified opinion;

+ Shareholders, capital contributing members own 10% or more of the charter capital of 01 securities company and related persons of that shareholder, capital contributing members (if any) do not own more than 5% of the charter capital of 01 other securities company;

+ Shareholders and capital contributing members who are foreign investors must meet the conditions specified in Article 77 of this Law.

– Conditions on the structure of shareholders and capital contributing members include:

+ There are at least 02 founding shareholders and capital contributing members who are organizations. In case a securities company is organized in the form of a one-member limited liability company, the owner must be an insurance enterprise or commercial bank or a foreign organization that meets the provisions of Clause 2, Article 77 of this Law;

+ The total capital contribution ratio of organizations is at least 65% of charter capital, of which organizations that are insurance enterprises and commercial banks own a minimum of 30% of charter capital.

– Facilities conditions include:

+ Have a secure workplace for securities business activities;

+ Have sufficient facilities, techniques, equipment, office equipment, and technology systems in accordance with the professional process of securities business activities.

– Personnel conditions include:

There is a General Director (Director), at least 03 employees with appropriate securities practice certificates for each securities business operation requested for licensing and at least 01 compliance control employee. The General Director (Director) must meet the following standards:

+ Not in the case of being prosecuted for criminal liability or serving a prison sentence or banned from practicing securities according to the provisions of law;

+ Have at least 02 years of experience working in the operational department of organizations in the fields of finance, securities, banking, insurance or in the finance, accounting, investment department of other businesses;

+ Have a certificate of financial analysis practice or fund management practice certificate;+ Not being sanctioned for administrative violations in the field of securities and stock market within the most recent 6 months up to the time of application submission.

In case there is a Deputy General Director (Deputy Director) in charge of operations, he must meet the standards specified in Points a, b and d of this Clause and have a securities practice certificate appropriate to the operations in charge.

– The draft Charter is consistent with the provisions of Clause 1, Article 80 of this Law.

Are all founding shareholders and capital contributing members of a securities company required to be organizations?

According to Clause 3, Article 74 of the Securities Law 2019, the conditions on the structure of shareholders and capital contributing members are prescribed as follows:

– There are at least 02 founding shareholders and capital contributing members who are organizations. In case a securities company is organized in the form of a one-member limited liability company, the owner must be an insurance enterprise or commercial bank or a foreign organization that meets the provisions of Clause 2, Article 77 of this Law;

– The total capital contribution ratio of organizations is at least 65% of charter capital, of which organizations that are insurance enterprises and commercial banks own a minimum of 30% of charter capital.

Thus, according to the law, the condition on the structure of shareholders and capital contributing members for a securities company is to have at least 02 founding shareholders and capital contributing members who are organizations. In case the securities company is organized in the form of a one-member limited liability company, the owner must be an insurance enterprise or commercial bank or a foreign organization that meets the provisions of Clause 2, Article 77 of this Law. Therefore, it is not required that all founding shareholders and capital contributing members must be organizations.