June 26, 2019 15:57

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Amendment of Securities Law: Strengthen management, compliance controls of securities companies

10:02 | 07/06/2019

VCN - Interview with Mr. Nguyen Kim Long (photo), Director of Law and Compliance Controls, SSI Securities Joint Stock Company.

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Interview with Mr. Nguyen Kim Long (photo), Director of Law and Compliance Controls, SSI Securities Joint Stock Company.

In the amended draft of the Securities Law, the drafting agency has added many specific provisions relating to securities business organizations. What do you think about these additions, Sir?

The amended draft of the Securities Law has many changes in regulations on securities business organizations such as: changing some licensing conditions; separating securities companies' licenses into two types, including operating licenses and business registration certificates; and specifying operations that the securities business organizations are able to do. The draft Law also classifies securities companies according to their size; sets up an investor protection fund; specifies foreign securities business organizations which open branches in Vietnam; defines responsibilities for the supervision of securities transactions at securities companies.

These changes are necessary in order to improve the performance of securities companies and to protect investors.

Does such supplementation create a legal corridor for securities companies to develop both in quality and quantity, as well as increasing the competitiveness of foreign securities business organizations when they are allowed to operate in Vietnam?

One of the major changes is that the operations of securities companies are specified in the Law. This will help strengthen management and compliance controls of securities companies.

On the other hand, such regulations will limit the creation and service provision of securities companies. In fact, the provisions of a law are always behind the needs in reality. Therefore, specifying products and operations is never enough.

Moreover, it is difficult to predict what the market will require securities companies to provide in the next 5-10 years. Therefore, I still hope that the regulations on products and operations of securities companies will be more open, so they can proactively provide products in accordance with the needs of investors and in accordance with their strengths. As such, products will be diverse and securities companies do not have to compete just by price.

From an investor's perspective, are such regulations enough to protect investors when participating in the stock market, Sir?

In the amended draft of the Securities Law, there are additional provisions on security funds for investors. In fact, this is a new regulation to protect investors when securities companies are insolvent. However, with this provision, the mechanism and level of contribution should be regulated appropriately to avoid a healthy securities company making a contribution to the payment of the insolvent securities company. If the level of contribution is too high, it will increase the operating costs of securities companies, but if the level of contribution is too low, the level of compensation for investors is negligible. Therefore, it needs detailed regulations on this issue.

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VCN- Mr. Le Duc Khanh, Strategic Director of Petro Vietnam Securities Company commented on the revised draft ...

In particular, the amended draft of the Securities Law should supplement regulations on the control of securities practitioners and professional ethical standards for securities practitioners. A securities practitioner is the one who provides products and services of securities companies to customers, and directly contacts customers, so it is easy to generate negative impacts. Securities practitioners who voluntarily abide by the professional ethics are the most effective way to improve professionalism and limit negativity and protect the interests of customers.

Thank you, sir!

By Thuy Linh/Kieu Oanh