introductory presentation - financial services agency · introductory presentation chapter 1-...
TRANSCRIPT
Introductory Presentation
Chapter 1- Overview of securities market in Vietnam
Vietnam at a glance
- Total Area: 331,230.8 km2
- Population: 92,695,100 (2016 estimate)
- Density: 280 ppl/km2
Source: General Statistics Office (GSO)
Geography
3/4 territory: low mountains and hilly regions.
Long coastline of 3,260 km
Tropical zone:
(1) Northern (from HaiVan Pass): humid tropical monsoon climate with 4seasons;
(2) Southern: moderate tropical with dry and rainy seasons.
Source: MOFA, DOSM under MONRE
People
Multi-ethnic country with 54 ethnic groups
Kinh people account for 86% of the population.
The most populous minorities are Tay, Thai, Muong,
Hoa, Khmer, and Nung
Each ethnicity has its own culture, thus, the
Vietnamese culture is diversified
The most popular custom is ancestor worship
Major religions: Buddhism, Catholicism ...
Source: MOFA
Economy
GDP (nominal, 2017): US$223 billions
GDP per capita (nominal, 2017): US$ 2,385
Source: GSO
Economy
Major sectors (Source: GSO):
Economy
Total investment in the
Economy in 2017
Total: ~USD 73bil.
Equals to 33%GDP
(Source: GSO)
Currency
Currency: VND
(Vietnam Dong)
Banknote samples
Current forex rate:
~22,800VND/1USD
Source: SBV, VCB,
Vietnamnet
Tourism
Total foreign tourists in
2017: 12,922,200
Number of tourist by
regions (in thousand)
Source: GSO
Tourism
Scenery of
Vietnam:
PhongNha Cave
Tourism
Scenery of
Vietnam:
TrangAn (old
capital)
HISTORY :
1993: Capital Market Development Board under the State Bank of Vietnam (SBV) was set up to research and prepare for the establishment of the securities market
1996: Establishment of the SSC as a governmental agency with 08 divisions
1998: Prepared to set up 02 Securities Trading Centers (STCs) in Hanoi (HASTC) and in Ho Chi Minh City (HOSTC)
2000: HOSTC was inaugurated and first trading session
2004: SSC was placed under the management of the Ministry of Finance
2005: HASTC was inaugurated
2006: First Securities Law was promulgated
2017: Derivatives Market started
2018: Proposal to revise Securities Law for next stage of development
Securities Market
Government
Ministry of Finance (MOF)
State Securities Commission (SSC)
Hanoi Stock Exchange (HNX)
Hochiminh City Stock Exchange (HSX or HOSE)
Vietnam Securities Depository (VSD)
SSC
Organization
Government: Approve Long-term Development Strategy, issue Decree
MOF: Approve Annual Plan, issue Circular
SSC: Overall supervision, licensing, inspection and administrative penalty
HSX: List stocks of mostly large companies, investment fund certificates
HNX: List stocks of mostly small and medium companies; organize
trading platform for unlisted public companies (Upcom); auction and
trade government bond; derivatives
VSD: Stock deposit, clearing; CCP for derivatives
SBV: Settlement for Government bonds
BIDV: Settlement for Stocks
Functions
Current situation2000 2017
Capitalization/GDP (%) 0.3 70.2
Number of listed securities 5 2,037
▪ Stocks /Certificates5 1.426 (732 listed, 690 Upcom,
02 ETF, 02 Certificate)
▪ Bonds 0 610 (571 Gov., 39 Corp.)
▪ Derivative - 1 (VN30 Future)
Average traded value per session (mil. USD) 0.06 220
Indirect foreign portfolio value (bil. USD) - 32.9
Number of brokerage firms 7 85
Number of fund management firms 0 46
Number of funds 0 36
Value of managed asset (bil. USD) - 10
Number of investor accounts 2,997 1,921,554 (22,561 foreign)
Current situationMajor Indexes Movement in 2017 (Source: SSC annual report)
Current situation
Percentage in the total market capitalization (Source: SSC annual report)
Current situation
- Policies:
Drafting new Securities Law
Plan to consolidate 2 stock exchanges
Continue measures to upgrade to emerging-market status at MSCI
- Some challenges:
Improve corporate governance
Effective enforcement of laws and regulations
Protect investor
Introductory Presentation
Chapter II- Enforcement
Supervision
MSD
Insider trading
Manipulation
Dept. of Public
Companies
Reporting and
Corporate Governance
of Public Companies
Approved Auditors/Au
diting Companies
Dept. of Brokerage
Firm
Compliance of
Brokers/Brokerage Firms
Dept. of Fund
Management
Compliance of Fund
Managers/Firms
Exchanges
Reporting of listed
companies/ members
Reporting of transaction of
internal person (directors, chief accountant …
and their relatives)
Inspection/Examination
MSD
Examination by case
Insider trading,
Manipulation
Dept. of Public
Companies
Examination periodic/by
case
Public Companies,
Auditing Companies
Dept. of Brokerage
Firm
Examination periodic/by
case
Brokerage Firms
Dept. of Fund
Management
Examination periodic/by
case
Fund Management
Firms
Inspectorate
Inspection and
Examination
Periodic/by case
All
Violation Handling
MSD
Refer to Inspectorate
Dept. of Public
Companies
Refer to Inspectorate
Cease and desist order, disapprove of auditing
Dept. of Brokerage
Firm
Refer to Inspectorate
Cease and desist order, suspend of licensed
operation
Dept. of Fund
Management
Refer to Inspectorate
Cease and desist order, suspend of licensed
operation
Inspectorate
Cease and desist order
Impose administrative
fines
Refer to Police
Violation Handling
04 securities violation considered crimes (Criminal Code of 2015)
(1) Provision of false information or concealment of information in securities activities:
Any person who deliberately provides false information or conceals information in offering, listing, trading securities, market organization, registration, depositing, clearing, or paying for securities in any of the following cases:
a) The loss incurred by investors is from VND 1bil (US$45,000);
b) b) The illegal profit is from VND 500mil (US$22,500);
c) c) The offender previously incurred a civil penalty for the same offence.
Violation Handling
04 securities violation considered crimes (Criminal Code of 2015)
(2) Use of inside information for trading securities:
Any person who has information about a public company or public fund which has not been published and could remarkably affect securities price of that public company or public fund but and uses such information to deal in securities or discloses it or provides it for another person for trading securities and:
- earns an illegal profit of from VND 300 mil.(US$14,000)
- or causes a loss to investors of from VND 500mil (US$22,500)
Violation Handling
04 securities violation considered crimes (Criminal
Code of 2015)
(3) Manipulation of securities market
A person who deliberately commits any of the (manipulating)
acts and: earns a profit of from VND 500mil (US$22,500) or
causes a loss to investors of from VND 1bil. (US$ 45,000)
(4) Forging documents in offering or listing profile
A person who forges documents of the offering or listing profile
and: earns a profit of from VND 1bil.(US$45,000) or causes a
loss to investors from VND 1bil.(US$45,000)
Punitive Measures
Administrative sanction:
- Main sanction: warning (lesser violation), money fines up to VND 2bil (US$90,000) for companies and VND 1bil (US$45,000) for individuals; suspension of licensed operation (representative office of brokerage firms, fund management firms) or licensed practioners, up to 24 months.
- Additional sanction: suspension of licensed operation (listing, business, tender offer…), up to 24 months; confiscation of violating instruments
- Remedy: forced to make remedy measures (disclosure correction, withdraw the issued share and refund the buyer…)
Punitive Measures
Administrative sanction:
2014 2015 2016 2017
Public, Listed Companies 50 44 56 122
Manipulation, Insider trading 2 4 6 7
Major shareholder, internal
share holders
33 60 51 199
Brokerage, Fund Firms 33 29 14 21
Others 3 13
Total 121 150 133 349
Punitive Measures
Criminal sanction:
Individual:
- Imprisonment up to 7 years;
- Fined of money up to VND5 Bil.
- Prohibited from taking certain profession, position
Starting from Jan. 1st 2018: criminal sanction on legal
entity for crimes from (1) to (3).
Challenges for enforcement
- Lacks the power to effectively collect evidence,
proof
- Challenges in cases involving cross-border
violation (committed by foreigners or foreign
entities)
- Connection between the brokers and violators in
market manipulation cases
Current situation
Proposing changes in Securities Law to address those issues:
- Enhance the power of SSC: powers to collect information, evidence from 3rd parties, banking account, personal statement/declaration when conducting inspection, examination
- Authority in sharing and conducting investigative/inspective request from other Regulators within MMoU, thus could request cooperation of other Regulators in cross-border inspection
- Require securities firms/brokers to supervise and report suspected transactions
Those presented above are of my specific interest.
Looking toward learning more from JFSA, and all
other participants.
THANK YOU VERY MUCH!
Thank you