Vietnam: How shall a securities company use capital for its business operation?

11:45, 10/10/2014

Recently, at the request of the Director of the Financial Department and banks and financial institutions, the Minister of Finance issued Circular No. 146/2014/TT-BTC on finance regulations for securities companies, asset management companies.

According to Circular No. 146/2014/TT-BTC of the Ministry of Finance of Vietnam, securities companies, asset management companies, branches of foreign fund management company licensed to establish and operate in Vietnam shall be responsible for:

cong ty chung khoan, cong ty quan ly quy, von, tai san

- the management, use and monitoring of all available assets and capital;

- doing accounting in accordance with current accounting regulations;

- fully, accurately and timely recording the use, fluctuation of capital and assets in the course of operation;

- clearly defining the responsibilities and handling for each department or individual for damage or loss of assets and capital.

Securities companies, asset management companies shall use capital and assets for their business operation in accordance with the Law on Securities and provisions in Circular No. 146/2014/TT-BTC. To be specific:

Securities companies shall:

- Manage separately between the capital and assets of securities companies and those of customers; not appropriate customers’ capital and assets in any form.

- Comply with restrictions on borrowing, lending, investment in accordance with the law on the establishment, organization and operation of securities companies.

Asset management companies shall:

- Ensure the independent and separate management of assets of each fund, each securities investment company, mandated customer’s capital and assets of the asset management company.

- Not use raised capital for finance investment; operation capital for financial investment shall be derived from the equity.

- Comply with the responsibilities and obligations of the asset management company, reduce the operation of the asset management company in accordance with the law on the establishment, organization and operation of the asset management company.

More details can be found in Circular No. 146/2014/TT-BTC of the Ministry of Finance of Vietnam, which takes effect from November 21, 2014.

Thu Ba

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