Circular No. 73/2023/TT-BTC dated December 19, 2023 on amendments to Circular No. 117/2020/TT-BTC prescribing methods for calculation of illegal gains or proceeds from violations against regulations on securities and stock market

CIRCULAR

AMENDMENTS TO CIRCULAR NO. 117/2020/TT-BTC DATED DECEMBER 31, 2020 OF MINISTER OF FINANCE OF VIETNAM PRESCRIBING METHODS FOR CALCULATION OF ILLEGAL GAINS OR PROCEEDS FROM VIOLATIONS AGAINST REGULATIONS ON SECURITIES AND STOCK MARKET

Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to the Law on Penalties for Administrative Violations dated June 20, 2012; the Law on amendments to the Law on Penalties for Administrative Violations dated November 13, 2020;

Pursuant to the Government’s Decree No. 118/2021/ND-CP dated December 23, 2021 providing guidelines for implementation of the Law on penalties for administrative violations;

Pursuant to the Government’s Decree No. 156/2020/ND-CP dated December 31, 2020 prescribing penalties for administrative violations against regulations on securities and stock market; the Government’s Decree No. 128/2021/ND-CP dated December 30, 2021 providing amendments to the Government’s Decree No. 156/2020/ND-CP dated December 31, 2020 prescribing penalties for administrative violations against regulations on securities and stock market;

Pursuant to the Government’s Decree No. 14/2023/ND-CP dated April 20, 2023 defining functions, tasks, powers and organizational structure of the Ministry of Finance of Vietnam;

At the request of the Chairman of the State Securities Commission of Vietnam (SSC);

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Article 1. Amendments to Circular No. 117/2020/TT-BTC dated December 31, 2020 of Minister of Finance of Vietnam 

1. Point d Clause 3 Article 3 is amended as follows:

“d) Illegal proceeds in the event that, in the period of manipulation of the stock market, there is any adjustment in the stock price which is calculated as total illegal proceeds during the period preceding the time of price adjustment (the ex-dividend date), and illegal proceeds in the period after the price adjustment.

Illegal proceeds made in the period before the time of price adjustment and the illegal proceeds in the period after the price adjustment are calculated according to the formula specified in this Clause. For the cases where total volume of stocks sold is greater than total volume of stocks purchased in the period after price adjustment, the price of the arbitrage volume specified in point c of this clause is the average buying price determined for the period preceding the ex-dividend date on which price adjustment is made according to the following formula:

P’=(P+Pa*a-C)/(1+a+b)

Where:

P’: the price of arbitrage volume as prescribed in point c of this clause.

P: the average buying price of stocks during the period preceding the ex-dividend date.

Pa: the price of stocks additionally issued to serve the exercise of preferential purchase rights.

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b: the ratio of stock division to increase the capital stock from the owner’s equity.

C: cash dividend.”.

2. Point h Clause 3 Article 4 is amended as follows:

“h) Illegal gains obtained by concealing information about the actual ownership of one or some stocks with the intention of evading, or assisting others in evading, the obligations to disclose information, or make tender offer, or comply with regulations on compliance with the rate of foreign ownership in Vietnam's stock market as prescribed in clause 4 Article 34 of the Decree No. 156/2020/ND-CP, as amended by clause 28 Article 1 of the Government’s Decree No. 128/2021/ND-CP dated December 30, 2021 providing amendments to Decree No. 156/2020/ND-CP shall be calculated as follows:

- For organizations or individuals that conceal information about their actual ownership of one or some stocks with the intention of evading the obligations to disclose information according to regulations or the obligation to comply when making tender offers or regulations on compliance with the rate of foreign ownership in Vietnam's stock market, the amount of illegal gains that the violating organization or individual obtains from commission of violations is total amount of money, securities and other interests arising from stock of which actual ownership is concealed;

- For organizations or individuals that assist others in concealing information about their actual ownership of one or some stocks with the intention of evading the obligations to disclose information according to regulations or the obligation to comply when making tender offers or regulations on compliance with the rate of foreign ownership in Vietnam's stock market, the amount of illegal gains that the violating organization or individual obtains from commission of violations is total amount of money, securities and interests thereof arising from the commission of violations, and shall be calculated on the basis of the contract or agreement between parties;”.

Article 2. Implementation

1. This Circular comes into force from February 05, 2024.

2. Any administrative violations which have been committed before the effective date of this Circular but have been detected or under consideration to issue penalty imposition decisions or decisions to impose remedial measures after this Circular takes effect shall be handled in accordance with this Circular if it provides less serious legal liabilities.

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PP. MINISTERDEPUTY MINISTERNguyen Duc Chi